I know that it's possible to create the option of subtitles for a DIVX disk. Subtitles take very little space. I also know that playing back subtitles is dependant on the DIVX player. So my question is simple; Is there an option on any PPC player that works with Axim to use subtitles? If so, which one?

Don't believe me? Aximifuwanna!

I'm not sure there are any... I usually have the subs hardcoded into the file, either ripping the DVD with subs or applying subs with the subtitle filter with virtualdub.

You can use a freeware program called Virtualdub with another freeware program called VobSub. VobSub acts as a plug in filter in Virtualdub to permanently add the subtitle. Check out www.vcdhelp.com and www.afterdawn.com or www.doom9.org. These sites have guides for all ripping and encoding.
I am new to the Pocket PC and just ordered my Axim. I have been using a freeware called GordianKnot (which is an all in one ripping, frameserving, audio and video encoding freeware) to re-encode my Divx movies into 200-250Mb files. They are awesome.