Hey green,
I just acomplished said feat.
I’m on linux with godaddy as well. I figured this out by reading the “Getting Started With Linux Shared Hosting” pdf available free from godaddy. See pg33.
This is a brief discription:
-Go to your Hosting Manager>Settings>Domain Management>Add Sub Domain
-enter blog in the Sub Domain field, leave the Path field in its defualt setting, click Save.
-wait untill the server configures these settings, this can take up to a few hours.
Note, the ftp will remain example.com/blog
Once the server is set up, login to WordPress and go:
Options>General Options> change the urls in both the ‘WordPress address (URL):’ and the ‘Blog address (URL):’ fields to blog.example.com
-Then click Update Options.
That’s it, keep in mind that this will break feeds or links to your page.
Hope this helps, unless of course you’ve already figured it out. If you have any trouble with this please feel free to contact me ross[at]rdmillar.com
Here is my blog for anyone wishing to see the url in action: blog.rdmillar.com
Cheers
Ross