Here's how I did it.
Add a sub-domain using cPanel, specifying the document root to /xxx instead of the usual public_html/xxx or edit the document root to /xxx later once the sub-domain has been created.
That's it. No need to change .htaccess. Access your sub-domain using xxx.domain_name. This works with sNews 1.7.1 and likely any other version.
Just discover that another way to solve this problem is to put a short .htaccess file with just one line:
in the sub-domain folder within public_html. This works too.