Burke, Thank you for pointing out I need to update my WordPress Installation instructions page. I haven't updated that page since about January 2012.
I did not make up the error message I showed there; at that time you could not install WordPress Multi-Site with domain mapping, in a subdomain.
Since then, WordPress and/or the Domain Mapping plugin changed, and now you definitely can install WordPress Multi-Site with domain mapping in either a Sub-Domain or an Add-on Domain. Much easier than moving any existing site in the root of your account. (You can't however install in a subfolder.)
I will update my WordPress installation instructions with notes about this. I've kept my Domain Mapping instructions updated.