(subdomains permalinks) – index.php = entirely too difficult?

hello.

like many others, i’ve been pouring thru this support forum looking for a way to not have index.php show up in the URL.

the default permalinks do not seem to work with subdomains.

for better or worse, i’m using yahoo small business web-hosting.

it seems like this should be a non-issue, since wordpress and yahoo seem to be partners in this effort.

here’s my directory structure:

(wp URI)
https://domain.com/wordpress

(blog URI)
https://sub.domain.com

here’s my ideal url:
https://sub.domain.com/2006/01/26/sample-post/

has anyone using yahoo small business hosting successfully achieved this structure?

anyone?