Subdomains/3rd level domains are only allowed for Office 365 for enterprises customers.
Do you have Office 365 for enterprises or Office 365 for professional and small businesses?
Also, this doesn't feel like a Windows Azure question any more, but more of an Office 365 domain management question and we should really move to another forum, but unfortunately there's just not a great option. There's an Office 365 community site that
has forums, but it's not as friendly as the MSDN or TechNet forums, and it forces you to authenticate with your Office 365 account and not your normal Windows Live ID.
Eric D. Boyd - Director, Chicago + Cloud at Centare
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