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.