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Okay, thanks Alan!

That logic seems incorrect since it doesn't account for root domain links that point to the subdomain. This would only apply if all the inbound links were from other root domains. For example, my blog on the subdomain has 1.4M inbound links, 1.35M of which come from the root domain. I'm guessing this is because it's a footer link. So, the PR6 of the blog seems largely inherited from the root domain, which has a PR of 6. Were you just trying to oversimplify it?

Is there a reason you are considering option 1?  Option 2 is simpler to implement and doesn't chain the redirects.  Unless there's some other, non-SEO reason for considering option 1, I'd go with the second option. If you are considering option 1 because you want to only be changing the domain and not also changing the subfolder when you do the domain migration, I wouldn't worry about it.  As long as you are setting up 301 redirects for each page to redirect to the new URL for that page, Google and Bing can understand that out just fine. Kurt Steinbrueck