Many people do it the complicated way:setcookie('name', 'content', time()-3600); But why do you make it so complicated and risk it not working, when the client's time is wrong?
Requests to subdom.will have both cookies, while browser request to or sends the cookie with the "value1hostonly" value.
If you are having issues with IE7 and setcookie(), be sure to verify that the cookie is set via http for http sites, and https for https site.
That is one of the reasons why the cookie values sent to browsers by some platforms are encrypted and timestamped, to ensure that they are actual and not tampered.
The next request from the browser will have both cookies in the $_SERVER['HTTP_COOKIE'] variable, but only one of them will be found in the $_COOKIE variable.