RewriteRule in .htaccess

If you're using apache, you need to match the host part of the url (e.g. blog.test.com) in a RewriteCond:

RewriteCond %{HTTP_HOST} ^blog.test.com$ [NC]
RewriteRule ^(.*)$ http://www.test.com/blog/$1  [R=301,L]

Answers

first of all, you must replace http://blog.test.com/whatever_or_empty to http://www.test.com/blog/whatever_or_empty in your HTML hrefs.

blog.test.com although a sub domain, is a different URL. i.e. when a RewriteRule does a rewrite to another URL an external redirect will occur. This will reflect in the browser. Be a temporary redirect(302(the default)) or permanent redirect(301).

So, using url rewriting to change the link http://blog.test.com/ to http://www.test.com/blog/ is useless.

Although, you can achieve this using Apache Module mod_proxy.

The Apache Proxy Modules has these:

mod_proxy: The core module deals with proxy infrastructure and configuration and managing a proxy request. mod_proxy_http: This handles fetching documents with HTTP and HTTPS. mod_proxy_ftp: This handles fetching documents with FTP. mod_proxy_connect: This handles the CONNECT method for secure (SSL) tunneling. mod_proxy_ajp: This handles the AJP protocol for Tomcat and similar backend servers. mod_proxy_balancer implements clustering and load-balancing over multiple backends. mod_cache, mod_disk_cache, mod_mem_cache: These deal with managing a document cache. To enable caching requires mod_cache and one or both of disk_cache and mem_cache. mod_proxy_html: This rewrites HTML links into a proxy's address space. mod_xml2enc: This supports internationalisation (i18n) on behalf of mod_proxy_html and other markup-filtering modules. space. mod_headers: This modifies HTTP request and response headers. mod_deflate: Negotiates compression with clients and backends.

You need at-least mod_proxy and mod_proxy_http modules enabled for the proxy to work:

you should have lines similar to these in your apache's conf file:

LoadModule proxy_http_module modules/mod_proxy_http.so
LoadModule proxy_module modules/mod_proxy.so

use this in your Virtualhost of http://www.test.com

ProxyPass /blog http://blog.test.com
ProxyPassReverse /blog http://blog.test.com
ProxyRequests On
ProxyVia On

<Proxy *>
Order allow,deny
Allow from all
</Proxy>

Definitions:

ProxyPass Apache Docs. ProxyPassReverse Apache Docs. ProxyRequests Apache Docs. Proxyvia Apache Docs.

You can also use a cache with mod_cache: mod_cache.
For more on caching, refer here: mod_cache Apache Docs.