Okay, the first thing you should do is contact your hosting co. and make sure they will allow subdomains - it's almost certain the will. Next, ask them if they have to set it up or if you can do it yourself. They can provide instructions if they allow you to do it.
This basic arcticle shows both Apache and IIS setup but your hosting co. may have it's own requirements:
http://content.websitegear.com/artic...main_setup.htm