I've been reading the localization documentation and it says that language site should be set up using a subdomain the example being; fr.somedomain.com
I may have said that somewhere in older documentation, but my current recommendation for multiple language sites is to use folder based sub sites as documented here:
and using related sites mode.
So your main language would be the root site like:
and you would have any number of folder based sub sites
or whatever you want for the folders.
It is also possible to do it with host name based multi sites, in that case you can use any host name or alteranate domain names like
Those are both just host names as far as the mutli site feature is concerned.
To me the big advantages of the folder based solution is that because they all use the same domain you can secure all sites with a single SSL certificate. And if using related sites mode once a user is signed into any of the sites he is signed into all of them so he can navigte around seemlessly as if it was all one site. Authentication cookies are always per domain so in folder based sub sites the authentication cookie is shared because they all have the same domain, but with differenthost names you get a different authentication cookie per site so you have to sign into each one separately.
Hope it helps,