If Vgs<Vt, then you're operating in weak inversion, which is an exponential, BJT like behavior.
Your Vds is fairly large for even fully inverted MOS transistors. As long as Vds is > Vdsat, you operate in saturation and not linear region. Since Vdsat is fairly small (theoretically <0 for fully inverted equation), you don't need to worry about it. In fact, if Vdsat is more then a few Kt/q (~26mV at room), then it stops having an effect.
Here is a nice document describing sub-threshold/weak inversion operation:
**broken link removed**
Greg