The one-click installs will make the sub-domains for you. If you are doing a simple install just pick your domain from the drop down. For the sub-domain part you can put anything you want (like blog so that would make your install at blog.mysite.com). I would recommend clicking on the custom install button though and just pick your domain to install to. I don’t believe you have to write anything after the / unless you plan on putting it in a sub-directory of your website. also on select database i would pick to automatically create one if you have not gone to the mysql section and created one manually. using the custom install will let you add more themes and plugins and such and manage the files yourself which is something you cannot do with the simple install.
You can create an unlimited number of sub-domains if you want manually by going to Domains and clicking on add new domain/sub-domain but that isn’t necessary with the wp one-click install.