When you get a hosting account you will have a main domain that you can access you account through it but in some hosting accounts you will get additional domains that you can put into your hosting. These are known as Addon Domains.
Addon Domains are simply an extension to your main domain so if your main domain is mydomain.com and you add an addon domain of myotherdomain.com this is how it will look like through FTP:
You can use addon domain for redirects which means that if someone types in myother domain it will send you to mydomain.com you can do this if you set the folder that it will locate the site files to the main domains address so when you set it up you will tell it to send the visitor to the mydomain address instead.
Subdomains are a very handy thing to use if you are testing a piece of code and you don’t want to buy a domain just for testing they will work exactly as an addon domain would work and the can be accessed through the main FTP as well. You can define then in this format: subdomainname. domainname.com
and now you can use the subdomain as a main domain. There are a few subdomains that most developers use as most people know them and it is easier for them to remember them:
m.domain.com & mobi.domain.com
Basically you can use them if you are testing a code or you are adding a service to your site(just to organise things.).
Parked Domains. When you buy a domain name and you point it to a server or when your domain is expired until someone buys that domain or until you make the site that domain still can get traffic to it. The Hosting companies will use the parking feature to make even more money off you using this feature.
How it works is that the server will display a single page content that is auto generated by the server for the visitors with some ads on them anyone who click on these ads the hosting company will get paid.