Go to manage domains in the panel and press the button "Add New Domain / Sub-domain.."
type something like dev.yourcustomersdomain.com in "domain to host"
I usually change the radio buttons to Remove WWW, but that's preference, I would advise against "Leave it alone" tho, that just creates confusion.
"Run this domain under the user:" -- in this case the best thing to pick is the SAME user the main domain is running on. This can be found one page back on the Manage Domains main page. Look for the domain and check the "web hosting" column for the user name. Doing this makes it easier to transfer your test sub-domain to the main domain.
Leave the rest alone, or adjust to your needs and press the "Fully Host this domain" button.
My answer conflicts with this instruction. Kelly7552 is correct for new sites, it provides better security. HOWEVER, in the specific case of a dev site that will be later transferred to the main URL, it's much easier to use the same user.