I have a site that im building: Example.com
I have made one folder in the main directory called Red

I have assigned a subdomain to that folder it is Red.Example.com

The settings to install a slave site is for Red.Example.com are:
* Site ID = Red
* Domain name = www.red.example.com,
red.example.com

* Deploy directory = /home/content/20/6118520/html/red

The main directory was listed as:/home/content/20/6118520/html
The site is with godaddy, and it says symbolic links allowed

Three questions:

Is this all correct? It shows a new joomla install however it shows that configuration.php is not writable

Can i install all the sites onto the same database as the master site using different prefixes?

If i install jomsocial into the main site now, will it share users to the slave site, did i have to install jomsocial first before i made a slave site?

I was a little confused with some of the tutorials so i wanted to make sure

1) This seems correct.
I suppose that you enabled the "create deployed directory" because you mentioned that the Joomla Installer is started.
So if the "Joomla Installer" can not create the "configuration.php" file in the "red" directory, you have to verify the permission of the "red" directory.
Perhaps there is problem of ownership or of permission.
In this case, Joomla give you the possibility to "copy/paste" the content of the "configuration.php" to let you build it manually.

2)Yes you can install several website into the same DB with different table prefix.

3) The key element for the sharing of Jomsocial is to build the slave site with sharing the users. If your slave site already share the Joomla users, if you add the "JomSocial" in your master, you can effectivelly declare in the slave site that you want to share the JomSocial (as the users are already shared). See the JMS Tool menu.
If the slave site had independent users (not shared) then you can not convert the website into a shared users website. The decision is taken when you create the slave site.

See the tutorial video 16 that explain how to share the users.
www.jms2win.com/en/tutorial#jms12x-16