Ok,
I'm confused.

My nuke site is on a sub-domain that I set up through CPanel, my question is, should I submit the url as subsite.domain.com or as domain.com/subsite?
Does it matter?
I've submitted my URL and sitemap using the domain.com/subsite format.

I've looked around for info on this and ended up getting more confused. Something about putting something in the htaccess in the root. I don't know.
I don't want to end up getting booted off of Google (Google has only indexed my main nuke subdomain page..hopefully not for long though!)
Anyone?

To give you a better idea of how my site is set up, the main(root) page is like a "hosting" page that has links to all my subdomains, my nuke being only one of them.
The other subdomains have have more success in getting indexed that Nuke, hence how I fond my way here.

It depends on how you have your nukeurl configured in admin, preferences / settings. If you have the subdomain (e.g. subsite.domain.com) use that for submitting your sitemap. If you have a subdirectory (e.g. domain.com/subsite) use that.

The important thing is that the sitemap links map the URL for the sitemap. Make sense?
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I feel I should add something here as a FYI for anyone else.
Something to be mindful of is that ALL url's submitted to google as a google sitemap MUST be for links WITHIN the same domain.

If you try to add links (deliberately or otherwise) to the sitemap which go outside of the domain, it will produce an error warning from google sitemaps.

Does using a subdomain instead of a main domain affect your seo ranking?

Not that I know of.

I'm giving away SEO technique tips for free here....

I have not found any evidence AT ALL to indicate a sub-domain would suffer adersely just because it is a sub-domain.
In fact if you visit some of the larger sites that take advantage of using sub-domains, you will probably find the sub-domains are actually ranked higher!

Why?
Well, when you think about it, it's obvious.
Why would you need a sub-domain?
Yep, thats right, to target a specific service/subject/product.

Lets look a little closer..........
You have a site called furniture.com
Now lets create some sub-domains;
teak.furniture.com
marble.furniture.com
Irrespective of any SEO techinques you apply, provided you apply the same techniques throughout, when searching for 'teak furniture' the teak.furniture.com sub-domain will ALWAYS be better than furniture.com by virtue of the fact the 'keywords' are contained within the url.

Thats *How* a sub-domain can and often does work better than the main domain

If you use Alexa or Alexa Ranking as a guide to your sites popularity, here's an interesting and useless fact. Once Alexa has indexed your site, any sub-domains will automatically inherit the main domains popularity rank (for three months).

So in summary, it shouldn't affect my SEO ranking if my domain redirects to a subdomain and in fact if I think of a good relevant name for my subdomain it should improve my ranking?

Absolutely correct.
Rather than redirecting though, if you are wanting good SEO, you would be better to put a page on the main domain which contains links to your sub-domains - unless you never intend for anything to be available at your main domain.

Carrying on from my previous example. On your main domain you would have;
index.html
teak-furniture.html
marble-furniture.html

The index.html might be a little about your site in general and contain text links to your other two pages and each of your sub-domains.
The other two html files would be content specific to 'teak' and 'marble' and contain links to index the remaining file and your sub-domains.

Using this sort of technique, you have no repeated content but have interlinked every page and sub-domain

Well nuke will be on my main domain and the only other subdomain will be for the survey I will be running.