Subdomain or Subdirectory – What is Best For SEO?

I have been reading articles and post related to this topic. How does a search engine behave when we talk about creating a new subdomain or can we have subfolder instead of subdomain. Well both have benefits as well as some issues. But I think it totally depends on what is your SEO link building and internet marketing strategy. Even both techniques can be follows same time in different ways. Few links have been attached; please go through them thorough which would eventually help you to make up your mind.

http://www.chuckaikens.com/2010/03/09/subdomain-vs-subdirectory/

http://www.karen-heslop.co.uk/2010/01/subdomains-pros-and-cons/

http://www.searchenginejournal.com/subdomains-or-subfolders-which-are-better-for-seo/6849/

http://expert-seotips.blogspot.com/2010/01/pagerank-and-subdomain-effect-on-seo.html