Subdivision Surface (SubD):

1. ...have arbitrary mesh topology like polygons. Faces in the mesh are progressively subdivided in order for the model to appear smooth. Maya uses Catmull-Clark algorithm to do that.
2. ...are smooth because they use a principle of continuity based on an algorythm. (The same idea, but not the same algorythm is used in NURBS).
3. ...use hierarchical level of details.
4. ...have arbitrary shader space. SubDs “inherit” texture coordinates from NURBS or polygons depending on what they were converted from. Laying out UVs for SubDs is also possible and is similar to UV mapping process for polys. Set of tools is somewhat more limited.

SubD Anatomy and Tools:

1. Create a Subdiv Primitives: Cube.
2. Components are same as polygons: Vertices, Faces (marked with numbers) and Edges.
3. Numbers on Vertices and Faces indicate levels of detail. The SubD surface is always continuous, and does not need to be smoothed. By switching between levels the model does not get refined. To refine a SubD surface means to create access to the next level of detail. It happens automatically during creasing. It is possible to deliberately create a new level of detail by using Refine Selected Components.
4. Display Components. Display Filter.
5. Modify surface by moving components. Undo changes by Deleting Vertices at a level where modifications were applied.
6. Full and Partial Crease. Uncrease.
7. Refine Selected Area.
8. Standard Mode vs Polygonal Proxy.
9. Clean Topology and Collapse Hierarchy.

Subdivision Surfaces are commonly used for:

1. Smoothing a finished low-poly model.
2. Refining existing proportions and details of a model, based on a low-poly cage.

Workflow 1:

1. Create a low poly model.
2. Set up the structure of features with Split Polygon Tool, Extrude Face etc and do most sculpting in the polygon mode.
3. Convert to Subdivision Surfaces using Standard Method.
4. Refine existing features by moving/scaling/rotating and creasing the SubD vertices and edges.

Workflow 2:

1. Create a NURBS model and edit it to your liking. Use patches if necessary.
2. Convert to Polygons using Quads as Type.
3. Combine patches or separate NURBS primitives into one model. Merge vertices or edges.
4. Convert to Subdivision Surfaces.
5. Continue from step 3 of Workflow 1.

Workflow 3:

1. Create a Subdivision Surface Primitive.
2. Edit it in Polygonal Proxy mode.
3. Switch to Standard mode and finish detailing.

Tips:

1. Model in quads.Rework triangular faces into quads.
2. Don't go beyond sub-d level 4, simplify the hierarchy by collapsing.
3. Try not to switch back to Polygonal Mode if you have edited any level beyond 0. It will slow down interaction and may cause errors.
4. If you edited in Polygonal Proxy and Standard mode several times, and switched between the two often you may need to Collapse Hierarchy in Standard Mode when interaction slows down.
5. Try to make changes on the Finer level only if you cannot achieve them on the Coarser Level.

Tutorials:

http://www.youtube.com/watch?v=ckOTl2GcS-E - general theory
http://plissken.fatalunity.com/tutorials/subdiv/index.html -a hand modeling tutorial
http://www.yiqunchen.com/publications/images/article1.jpg - human head in SubDs
http://maxrovat.sns.hu/subdiv/subdivmodeling.htm - advanced SubD strategy tips
http://www.youtube.com/watch?v=k_S1INdEmdI - tips on optimizing topology