WordPress MU

will giving blogs in subdomain rather than directory can cause any problems ?

like...?

Either way, they are virtual, remember. As long as you have things set up for the subdomains, there shouldn't be any probs.

if both features are by default on WPMU, it's because they are both tested efficiently on most of the possible server configurations...

so the best way to see if it cause problems is by testing it with a default installation...