Occasionally, you will want a subfolder for a site - such as http://developmentsite.example.com.
While not always preferable, for security reasons it's very simple to do.
We require the following:
Fresh copy of Joomla! 1.5.21 or greater.
Setting up a new database.
Make sure your host helps you set up a subdomain in your DNS.
Connect to your web server with your FTP client (FileZilla).
Navigate to the root directory of your subdomain.
Upload a fresh copy of Joomla! into it - be careful you don't overwrite your current site.
Open your database manager (typically phpMyAdmin) and create a database - record the username and password.
Open your browser and navigate to the new subfolder:
http://www.example.com/subdomain
The normal Joomla! install should commence now.
The browser treats this folder like any other folder. The browser will load the index.php file and run it.
You can load up any extension, template, module, or anything else.
This is a great way to have a development site reside on your production server. The positives to this are you will know if you have any server-related issues. It also makes it simple and quick to move from development to production.
The downside is if you have a script run-away with itself, it could impact your production site.
The best practice is to put the development site on another server or a local machine.