Subdomain vs. Root Domain design

[customerparadigm.com]

I know that there are penalties if you have a navigation item in your categories that links to another site (root domain) that yields the same design as the original link.

Is there any negative SEO implications with having a subdomain with the same design as the root domain i.e. root.com vs. store.root.com

And the navigation functionality within will have links to both store.root.com as well as root.com directories?

Thanks in advance.

[egorpe]

There's nothing specifically negative in it. How many Web 2.0 companies use blog.domain.com and link to it from the homepage? A lot. The question is whether is a good design. I believe, it's not. Different domain is a different domain. Why dilute the pagerank of the main site by sucking it into the subdomain when you can simply have /bog, /store, etc?