Rand never denied that unconscious (or "subconscious") processes occur in human thought. What she appears to have denied is that these processes could ever originate, in whole or in part, from below the threshold of consciousness. Hence, for Rand, "subconscious" thinking is simply conscious thinking that has been automatized, or "programmed," like with a computer. Since human beings, in the Randian view, are blank slates, nothing can ever get into the "subconsciousness" that wasn't first in the individual's conscious.
This view, at the very least, is a gross exaggeration. Consider what George Lakoff and Mark Johnson have to say about the cognitive unconscious:
Conscious thought is the tip of an enormous iceberg. It is the rule of thumb among cognitive scientists that unconscious thought is 95 percent of all thought—and that may be a serious underestimate. Moreover, the 95 percent below the surface of conscious awareness shapes and structures all conscious thought. If the cognitive unconscious were not there doing this shaping, there could be no conscious thinking....
The cognitive unconscious is posited in order to explain conscious experience and behavior that cannot be directly understood on its own terms.... The details of these unconscious structures and processes are arrived at through convergent evidence, gathered from various methodologies used in studying the mind. What has been concluded on the basis of such studies is that there exists a highly structured level of mental organization and processing that functions unconsciously and is inaccessible to conscious awareness. (Philosophy of the Flesh, p.13,103-104)
Or consider what the neuroscientist Antonio Damasio has to say on the unconscious:
The field of social psychology has produced massive evidence for non-conscious influences in human mind and behavior.... Cognitive science and linguistics have produced their own evidence. For example, by the age of three, children make amazing usage of the rules of construction of their language, but they are not aware of this "knowledge," and neither are their parents. A good example comes from the manner in which three-year-olds form the following plurals perfectly:
dog + plural = dog z
cat + plural = cat z
bee + plural = bee z
The children add the voiced z, or the voiceless s, at the end of the right word but the selection does not depend on a conscious survey of that knowledge. The selection is unconscious. (The Feeling of What Happens, p. 297)
Experiments in cognitive science have demonstrated that unconscious processes accompany and underly every facet of thinking. Indeed, some experiments suggest that most conscious thinking may be the result of unconscious processes, so that Rand nearly got it backwards. As cognitive scientist Richard Nisbett explained:
In one of our experiments, we asked people to pick out the nylon panty hose of the best quality from a set of four pairs that were arranged in front of them from left to right. Actually, the panty hose were identical, but our subjects picked the right-most pair four times as often as the left-most pair. When we asked them why they picked that pair, they gave reasons of one sort or another, but never mentioned position. And when we asked them if position could have influenced them, they denied it and sounded annoyed, or, in some cases, seemed to think they were dealing with madmen. The evidence of a number of related experiments suggests that most of the time we don't know why we think as we do, even when we feel certain we do." (Morton Hunt, The Universe Within, p. 276-277)
And finally, in conclusion, consider the testimony of Gilles Fauconnier and Mark Turner:
Nearly all important thinking takes place outside of consciousness and is not available on introspection; the mental feats we think of as most impressive are trivial compared to everyday capacities; the imagination is always at work in ways that consciousness does not apprehend; consciousness can glimpse only a few vestiges of what the mind is doing; the scientist, the engineer, the mathematician, and the economist, impressive as their knowledge and techniques may be, are also unaware of how they are thinking and, even though they are experts, will not find out just by asking themselves. Evolution seems to have built us to be constrained from looking directly into the nature of our cognition, which puts cognitive science in the difficult position of trying to use mental abilities to reveal what those very abilities are built to hide." (The Way We Think, p. 33-34)