To create a sub domain cPanel asks for the name you wish to use.
MAKE SURE the subdomain name you give it doesn't have a folder already named that name. If it does the sub will not work.
Example... I want to create the subdomain test.hostgator.com so my sub name is going to be test. If I already have a folder in my ftp named test I need to delete it or rename it to something different before I create the subdomain with the test name from cPanel.