pinkedge,
There is a way to bundle the subs and avi into one file that is playable in hardware players that are DivX compatible. DivX uses what is known as XSUBs to display the subs in the player. There is a free program that will convert your .srt or idx/sub subs to XSUBs and attach them to your .avi file. You can get the free program here:
http://www.calcitapp.com/AVIAddXSubs.php
The created file will play with the subs only in a DivX compatible hardware player. This program is not intended for making files to play on your PC. You can however, play them in the DivX software player available from DivX. See authors link above.
LeapinLar