Today's morning reading list:

Search Engine Roundtable on Major Google SEO Change: Google Prefers You Don't Use URL Rewrites
http://www.seroundtable.com/archives/018319.html

Search Engine Roundtable on Google Webmaster Tools warning
http://www.seroundtable.com/archives/017751.html

Matt Cutts on Subdomains vs Subdirectories - seems it is still an issue in question - especially considering there are still fresh comments on the post.
http://www.mattcutts.com/blog/subdomains-and-subdirectories/