Today I have tried to setup apache wildcard at domail level and directory level, and its worked as expected by following
Eg :
xxx.mydomain.com => /var/www/xxx
yyy.mydomain.com => /var/www/yyy
and the vhost is
<VirtualHost *:80> VirtualDocumentRoot /var/www/%0 ServerAlias *.
mydomain.com</VirtualHost>
Ref :
http://serverfault.com/questions/182929/wildcard-subdomain-directory-names
http://httpd.apache.org/docs/2.2/mod/mod_vhost_alias.html