I have a website sitting on an IIS 7 server: WWW.example.COM
I would like to create several sub domains that looks like SUBDOMAIN1.example.C
This one drove me crazy... basically you need two things:
1) Make sure your DNS is setup to point to your subdomain. This means to make sure you have an A Record in the DNS for your subdomain and point to the same IP.
2) You must add an additional website in IIS 7 named subdomain.example.com