I created a very elaborate explanation for subspace in my old Starforce mod, which I still use most of today. Keep in mind that this description is intended to come from more than a thousand years after FreeSpace 2, so it references technologies that do not exist in FreeSpace 1 or 2.
In simple terms, subspace is the 'filling' that the space-time membrane of the universe rests on. Imagine an extremely wrinkled and distorted sphere. The interior of this sphere would be subspace, and the outer 'skin' the universe we exist in. The convolutions in space-time and the nature of subspace mean that a few minutes' travel through subspace can cover hundreds if not thousands of light years.
However, one cannot just enter subspace at a whim. The 'thickness' of the space-time membrane makes it impossible to transition into subspace except under certain conditions, and, furthermore, subspace is saturated with a seemingly limitless 'energy soup' that would annihilate any physical objects within subspace (this energy-rich ether is the source of the swirling glow associated with all forms of subspace use). Subspace nodes solve both of these problems.
A subspace node creates a corridor of realspace through subspace, connecting two points in the universe. Naturally-occurring subspace nodes are extremely unstable, collapsing within seconds of their formation. However, the more traffic passes through a subspace node, the more stable and permanent it becomes. A well-maintained node can exist indefinitely.
There are estimated to be several million permanent or semi-permanent subspace nodes linking star systems in the Milky Way galaxy. Of these, over 1.5 million have been charted. The origin of the vast majority of these long-lasting nodes is unknown, and historical record indicates they have been in use by other civilizations for millennia before humans developed spaceflight. Theories that the ancient, long-vanished Shivan race created these nodes has been mostly discredited--the Shivans could not have had an empire of millions of systems, even before their war with the Zica, and, at any rate, the Shivans sterilized every planet they ever inhabited to wipe out all Zica presence in this galaxy, and the number and distribution of devastated worlds does not support such theories.
Subspace nodes can be artificially generated with the correct calculations, a large amount of energy, and a subspace drive. Most spacecraft can only create very short nodes, usually no more than 10 light-years, on their own, but larger starships can travel hundreds or even thousands of light-years without a pre-existing subspace node. Most artificial nodes have a lifespan of an hour or less. Passing additional ships through them can prolong their existence.
Dedicated subspace portals, while expensive and energy-intensive, are a more permanent solution for the creation of subspace nodes. Each portal is composed of multiple counter-rotating components that together create powerful subspace distortions. The first portal discovered by human beings was encountered in 2367, and named Knossos. After the Second Great War, humanity began building their own portals based on the design of Knossos, the first reconnecting Delta Serpentis to Sol in 2391. Portals that are used enough can create permanent subspace nodes, such as the Delta Serpentis-Sol node, which continues to exist long after the portal was dismantled.
The most advanced known use of subspace for technology is subspace rifts. This extremely dangerous form technology involves opening a hole in realspace that, instead of tunneling a node through subspace, opens directly into subspace itself, releasing minute qualities of the extremely energetic ether. The energy density of this ether is greater than even the most advanced antimatter applications. By carefully controlling the subspace rift and the release of ether, one can use it for power generation, or the technology can be used as a weapon--for instance, a bomb that tears open subspace, annihilating any nearby matter, or the subspace rift effect used by the Shivan Sathanas fleet in 2367 to destroy the star Capella and its entire solar system (widely believed at the time to be a supernova, it was actually a massive eruption of energy from subspace itself whose expanding blast front atomized the star and hurled its remains into space). The problem with this is that even the smallest lapse of control can cause a benign energy generator to become a bomb of colossal proportions. However, subspace power generation has one incredible advantage--as it taps the infinite, self-replicating energy ether of subspace, drawing power from beyond our own universe, it is not bound by the law of conservation of energy, which means that we could draw power from subspace literally forever. Untold billions of years hence, if there are any human beings left in the universe, subspace rift technology will be their lifeline, allowing humanity to flourish indefinitely even as the cosmos cools and dies around them.
The intrasystem jumps in FS1 and FS2 I imagine as being ships creating their own nodes to hop a few hundred million miles through space. It would be effectively useless as a method for interstellar transportation because (a) trajectory calculations lose precision with increasing distance from large gravity wells which serve as "landmarks" to orient realspace to subspace, and (b) attempting to form a node more than a couple of times would rapidly deplete a ship's fuel supply.
