So it'd be the Yonge-(Front? Lakeshore?)-Dufferin line? Interesting. I know 29 Dufferin is a very busy route.
Yonge-Lakeshore (or Bremner)-Duffin, yup. The subway would basically replace the previously-planned WWLRT through that stretch. And realistically, the WWLRT was going to be underground until just before Spadina anyway, so the cost differential isn't really that much for that section. For the stretch from Spadina to Bathurst it can either run under the Gardiner, or do cut and cover through the wide median of CityPlace (again, the WWLRT routing). From there it can either curve up to King, or go through the Ex. Either way, it would then run up Dufferin.
The key to all of that is the hub that is created at Dufferin & Queen, with the WWLRT, QWLRT, Y-D Subway, and various GO REX lines all at one spot. Huge hub potential there.
The one thing that I'm trying to figure out how to solve is the dilemma of what to do with Dufferin north of Bloor. Not enough to justify a subway, but having it be a T-station is going to put even more pressure on the Dufferin bus. I'm thinking of doing something like what I proposed for Jane south of Bloor, which is peak period buses only lanes for 2 of the 4 lanes, but to where? Eglinton? Or all the way up to Wilson Stn? Any thoughts would be appreciated.