Whichever way you do it, you'll need to hook into your domain's master DNS servers. Maybe your DNS server operator has an API (or you need to find one who does)

Whichever way you do it, you'll need to hook into your domain's master DNS servers. Maybe your DNS server operator has an API (or you need to find one who does), or you run your own DNS server and do it yourself. Operating DNS servers isn't rocket science, and reloading/refreshing the name database is generally a pretty well-supported feature. If you're letting users point their subdomain at their own IP address or server, you'll probably want to set a relatively low TTL - most dynamic DNS services use 15 minutes - although you should be aware that this will increase the load on your DNS server. If it's just a matter of creating subdomains that point at your servers and dispatching on virtual hosts, you can safely use more usual TTL values.