I have a 220 line feeding a small 2 breaker sub in my garage; I no longer need the 220. Is it OK for me to then to use each leg and share the neutral to run 2 110 lines or replace the 220 sub with a smaller 110 sub? Also it is bx so the housing is connected to ground.

How many wires and what colors are coming into your panel now?

3- Red , Black and White - one double breaker with both poles tied together with a black plastic bar.

Yes. You should be able to replace your double pole breaker with two single pole breakers (or potentially just remove the tie bar if two single pole breakers were used to make a double pole breaker) and you're in business.

What amperage is the double pole breaker, and what amps do you want for each of the 120V circuits?

Two twenty's are more than enough, I might even down grade them to 2 15's since they are old as the hills and I have plenty of 15's around here doing nothing. Thanks!