a subdomain is the part before the domain name... like "maps.google.com" is a subdomain of google.com
You could also do the same thing with a subfolder, sorta... they could have done google.com/maps
subdomains are frequently used to help separate distinct areas... rather than lumping them under the main domain.
for example, my personal site is upmykilt.net, instead of using subfolders for my photos gallery I have the subdomain
http://photos.upmykilt.net I do the same stuff with our work items. I don't want this to be part of my main site at bauercompanies.com, so for now it's set up at
http://test.bauercompanies.com - and that's where I went to with my browser to set it up.
If you did yours in a sub folder, such as
http://mydomain.com/opengoo - then that is where you need to go to do the install.