How can I fix this so that mailboxes can be created on the second subdomain (child2.domain.com) as well?
I would also check to ensure that you have network resolution between the newly added child domain and your existing Exchange 2007 server. In addition, you could also attempt to run /PrepareAd and /PrepareAllDomains.
Finally, there is another useful article from Microsoft that outlines common mistakes when upgrading to Exchange 2007.
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