Sub-domains are "sub" accounts under your domain name. For example, if your domain name is www.yoursite.com, you might create a sub-domain called yourname.yoursite.com. Whereas "yourname" is the sub-domain.
Sub-domains are separate from your main domain. You can put an entirely differently web site within your sub-domain, and it will not affect your main domain (except that any files you put inside your sub-domain will count against your main account space).