I came across a DivX AVI file that was in Japanese, but came with the SRT file for the subtitles. You can watch the file with subtitles in QuickTime (with Perian) if the SRT file is in the same folder as the AVI file. It also seems that the SRT file has to have the same file name as the AVI, apart from the extension, obviously.When saving the AVI as a self-contained movie, the resulting .mov file has the subtitles integrated (hardcoded). Hence, it is just one file that can be watched in iTunes / FrontRow. I didn't get around yet to exporting the movie for iPod to see if the subtitles are included then as well, after being properly transcoded.
