See, you're going to have the folder name wp-subdomains-revisited (remember I've ben telling you this multiple times?), but you've hard coded in your location like this: register_activation_hook( 'wordpress-subdomains/subdomains.php', 'wps_install' );

You need to change that. Read http://codex.wordpress.org/Function_Reference/register_activation_hook for directions on how to do it dynamically.

Also you need to put your instructions.txt into the readme, where it belongs.