Pretty clear to me also...
Basically, you must create a sub-domain for the multi-store.
It is NOT a completely new store, it pulls the products from the main store data base.
Also rename .htaccess.txt to .htaccess
That should do it.
Multi-store works good if you have, for example, multiple locations with the same products or less products than the main store has. You CAN NOT add different products to the new store.
You use the same Admin Panel to control both stores attributes.