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I have a service in which I'd like to do the following:

Receive the customer order and set up a subdomain (of our main url) to a specific ip address (seperate ip address) that we know ahead of time. This should be done automatically with an API. We already have the main hosting box, plus the boxes we are renting out.

I'm assuming we need a DNS type service in order to most effectively achieve this, what are some good ones that would fill our needs the in the simplest manner?

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You forgot to state what is your OS but if you are on *nix i would say BIND

To interact it with your api it would be very simple as well as you have the domain zone and all you have to do is check wether or not that given subdomain exists or not and add the new line to it.

Just as an example if i had to add a new subdomain to a domain zone on it i could simple use the follow command:

echo "subdomain        3600      IN        A      192.168.0.1" >> domain.zone

Ofcourse you will be doing it with some more precautions on your code but i just meant to show how easy it would be to add a new subdomain pointing to an IP on it.

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So could I enter a dns record in my registrar that would point to our web machine which is running this software and all those subdomains would propogate correctly? –  Travis Oct 18 '10 at 6:54
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If you go this route, you will need to automated bumping the domain serial number as well, or the slave servers won't pick up the new data, and you'll get coherency problems. –  MadHatter Oct 18 '10 at 8:36
    
Is there a service that takes care of all this and I can pay some monthly fee? –  Travis Oct 18 '10 at 12:36
    
@Travis yes with BIND you can do all that, initially if you system is not big enough you can have 2 ips on a dedicated and create your own nameservers to use at registrars and then make a code to update the domain zone and reload the service making every change avaiable. Once your system grows more you can expand it to 2 dns servers in different networks for failover, etc... –  Prix Oct 18 '10 at 14:51
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