Pages in domain?

Hello guys,

I’m currently trying to install wordpress on my host and customize my own theme, I’m a graphic Design student so intend to build a portfolio to accompany my blog.

1 of my concerns is that on a friends website, in his navigation it takes you to http://www.hisdomain.com/portfolio whereas if i create a page named portfolio and visit it goes to mydomain.com/?p=1

Im wondering how has he gone about doing this? (Id ask myself only he paid a coder to do it) I presumed he installed wordpress in multiple directories only he says he only has 1 login?

And does anybody have any nice examples of portfolio.blogs powered by wordpress?

Thanks in advance everyone : )