Today, a friend asked me how to setup his server so that he can give away Sub Domain names under his domain to people who want to use his PHP application, he was asking all sort of stuff like how does he rewrite apache config files and all this stuff, i can see how he is imagining the system but this is not the smart way to do it really.
All you need is a dedicated IP address, a hosting account that is accessible by its IP address, and you are good, why take the long route.
It is the simpler more flexible way, and it is the only sensible way i think, So i made a little tutorial to show him how here, now all i need to do is call him up and tell him to visit my blog for the answer 
Let me pick a fancy name for this
Dynamic Sub Domain Allocation, what u waiting for, click it