Multiple Craft install configuration in subdomains
I also use MAMP. Here's my general process (I've used generic names in this example; but feel free to rename folders, hosts, as needed):


create the folders for your two sites:

/Applications/MAMP/htdocs/domain.craft.dev
 /Applications/MAMP/htdocs/subdomain.domain.craft.dev
Download craft, unzip and copy the public and craft folders to your new folders:

/Applications/MAMP/htdocs/domain.craft.dev/craft
 /Applications/MAMP/htdocs/domain.craft.dev/public
 /Applications/MAMP/htdocs/subdomain.domain.craft.dev/craft
 /Applications/MAMP/htdocs/subdomain.domain.craft.dev/public
Create two new hosts in MAMP, 'domain.craft.dev' and 'subdomain.domain.craft.dev'; set the 'document root' to the respective '/public' folders; start server. (I also have the server set to serve on port 80 instead of the default 8080; which avoids problems with your craft configuration).
Using Sequel Pro (phpMyAdmin), create two new databases. 'craft_domain' and 'craft_domain_subdomain'.
In each of the sites. 


Rename 'public/htaccess' to 'public/.htaccess'
Set permissions on the following folders and all contents to 777 (for now; will want this more restrictive on public servers)


craft/app
craft/storage
craft/config (technically only need it on the license.key file)

(optional) delete 'web.config' from 'public' and 'craft' folders (assuming you don't need them)

Open 'craft/config/db.php' and set the database connection details (server, port, user, password, database).
Open 'craft/config/general.php' and set your config settings, if any.
Open 'public/index.php' and confirm that $craftPath = '../craft'
Navigate to your site in the browser (domain.craft.dev) and (subdomain.domain.craft.dev) and follow on screen instructions to continue install.
Have a beer and celebrate. (maybe 2... one for each site?)


(Did I miss anything?)

Advanced. For steps 6, 7 and 8 above, I actually use a slightly different setup. Instead I use this multi-environment configuration method from the craft cookbook site which allows you to define your environments from within your 'index.php' file; combined with Ben Parizek's technique as described in this answer for automatically configuring 'siteUrl' and 'basePath' environment variables. Note: doesn't work well if MAMP is set to serve on port 8080.