With Mozzers SubSystem you can host unlimited subdomains pointing to anywhere. All you need is a PHP enabled web server. Comes with nice, quick installer, Only the admin can add and remove subdomains.Visit publisher site: Mozzes SubSytem
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I found this script extremely easy to install, and it does the job effectively. If you need a simple & easy to setup and use subdomain manager (subdomain.yoursite.com) then go no further. I found this useful cuz I manage a large site with different sections and it's easier to get around using subdomains. If you're looking to offer people subdomains then you might want to consider a different type of script with a sign up front end. This is more for webmasters and admins.