Hey Dude,
Sorry you're having so much trouble. I have to confess, what I did really didn't make too much sense to me because in this MVC framework, the lines that were in the subsites/_config.php file should have been picked up and ought to have worked without moving them. However, for some unknown reason, moving those lines out of the subsites/_config.php file and into the main mysite/_config.php file seemed to do the trick for me. The exact lines I moved are as below (and I put them at the end of the _config.php in the mysite folder (mysite/_config.php):
Object::add_extension('SiteTree', 'SiteTreeSubsites');
// Hack - this ensures that the SiteTree defineMethods gets called before any of its subclasses...
new SiteTree();
Object::add_extension('ContentController', 'ControllerSubsites');
Object::add_extension('LeftAndMain', 'LeftAndMainSubsites');
Object::add_extension('LeftAndMain', 'ControllerSubsites');
Object::add_extension('Group', 'GroupSubsites');
Object::add_extension('File', 'FileSubsites');
Object::add_extension('ErrorPage', 'ErrorPageSubsite');
if (class_exists('SiteConfig')) Object::add_extension('SiteConfig', 'SiteConfigSubsites');