This is an age old debate and is found on almost all domain forums so why not here.

What do you guys prefer.
1. forums. domain .com
2. www. domain .com/forums

First one is good coz it is essentially a different domain name, hence more spots on search results page.
The second one is supposedly good for page ranks and showing authority due to more content.

But these are old school of thoughts. These days the search algorithm has been updated to take these into consideration. From what I followed it is now more of a personal choice than any considerable advantage using either of the two.

I personally like the first one. What do you guys think?

I prefer /forums since I am used to it, but would it matter much in terms of SEO?

I believe it's best to use it as subdomains. The URL is shorter and therefore more user-friendly. Also I believe I read somewhere that subdomains were better in terms of SEO, but I'm not sure if that's a fact or not.

i would use subdomain only if the main purpose of the site is not a forum. meaning, its just a sideshow of the site.
i use the /forum for redirections from the main url.

i would say subdomain only for the fact that some directories don't allow folders to be listed whereas they will allow a subdomain

as far as terms of seo, doesn't matter one bit, pr doesn't matter....
it's all just a preference thing....i prefer subdomains, i think it looks a bit more professional...

i prefer forums. domain .com

it looks more professional to me.