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Google is good at understanding the relationship between sub/primaries via linking and etc.  and some of the issues may be more of server response time for the sub and etc. I agree w/Ross--I prefer directories. However, if the structure has been around a while and migration is difficult,  I don't see a huge benefit in migrating. Also, I believe there are some ways to use .htaccess that you can rewrite a subdomain to the directory. See this video from Google's John Mueller for more information.

Hi Kevin, Afraid I don't use Sharepoint but a quick Google came up with the following- http://www.mavention.nl/blog/sharepoint-redirects-revisited-301-302 As you mentioned a 301 is better then a 302. Rel=canonical does take time for Google to take note did you give it enough time ? To Answer the main question I hope the above link helps.