Hi Colin,
Thank you very much for the explanation. The paper and the link you suggested were very useful. You were right, hierarchal clustering is what I was looking for, especially complete linkage, although Lance-Williams algorithm is very interesting. However, taking into consideration what Edgar says about agglomerative clustering in general, makes me wish I could test it in my case, which I don't know how :) However, going back to Qiime I couldn't find any method that implements complete linkage hierarchal clustering, except of mothur which unfortunately requires an alignment. As you may already know, unlike 16S, fungal ITS sequences are difficult or shouldn't be aligned.
I also tried using hierarchal clustering in usearch8, but it outputs only a cluster.txt (contains two columns 1- is a number and 2- is something like rep. seq. ids) and a tree. I wish it gave something like OTU table (which instances in which clusters). if I can't find my way I will just go with a higher similarity threshold as you said.
Please let me know if there is any script in qiime that implement hierarchal clustering or if you have any comment on what I just said.
Thank you very much
Ahmed