Is this possible with htaccess
http://domain.com/index.php?u=userone
turn to this?
You don't actually need .htaccess for the dynamic subdomains.
Dunno why everyone are so stick with it.
As soon as you will get all *.example.com requests directed to your document root, you will be able to distinguish them using HTTP_HOST
env variable.
What you really need is to set up your DNS record. And no .htaccess could help you with it.