Add-on domain can be compared to a standalone web site with unique content. To add an add-on domain you need to register a domain and have your nameservers pointed to the same address they are pointed to your main address. Add-on domain will create a corresponding domain folder in public_html folder on your server.
There are 3 ways to access add-on domain:
Add-on domain will have its own stats, email accounts,FTP and CGI access.
Subdomain also is a site with unique content, but does not require you to register a new domain name. Instead, subdomain utilizes an existing domain. As a great example to show you, is Google's most popular subdomain mail.google.com.
This is simply a domain that points to an existing domain. For example, if your parked domain is companyparked.com which is parked on the mymaindomain.com, when somebody will access companyparked.com he will be redirected to mymaindomain.com. You are required to have park domain registered.
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