How do I get a subdomain to start working? I created the subdomain and it created a new folder with the same name.
What else do I have to do to actually see it on the web?
Yes, you should be able to. You may want to contact your host, although it sounds like a DNS issue at least for the time being. Check the A record on dnsstuff.com, and do an nslookup in DOS on the subdomain (C:\>nslookup sub.domain.com).