First, get the following:
http://www.afterdawn.com/software/video ... vobsub.cfm
you should be able to watch the subtitles with your movie now. Just make sure the movie name is the same as the subtitle file name. eg/
Movie.avi (film)
Movie.srt (subtitle)
If you still need more info, read the following link, which will also help you to incorporate the subtitle file into the movie.
viewtopic.php?t=1697