I created a subdomain called watches, that should be watches.mydomain.com. It has a path of /public_html/watches
When I type that in the brower bar, the address stays correct, but the html that is retrieved is from mydomain.com, not the folder for the subdomain.
Any ideas what would cause it to not be directed to the proper folder?
There are a number of things it could be, but you might want to check to make sure that there is a NameVirtualHost directive in the apache config file for the IP address. I've seen accounts where the absence of such a directive causes problems like this.
In this case, there was a NamedVirtualHost directive. But looking for that caused me to look at the VirtualHost entry for mydomain.com a little closer. Turned out that one of the Server Aliases listed for that domain was *.mydomain.com. That entry apparently took presidence over the submain virtual host directive. I removed the wildcard alias, and it now works fine.
Having a wildcard subdomain along with hard-coded subdomains is not an issue, just make sure the virtualhost wildcard entry is below all other virtualhosts entries. Apache parses top-down.