The DSTWO/iSMM/iPlayer all support external subs...though if it is softsubbed within the container format (like an .mkv file), chances are that the file will utterly fail anyways. Best option for external subtitles would be one of the above flashcarts and a not TOO HQ .avi encoding and an external .srt. Supposing that none of the three flashcarts are available to you for whatever reason, you have no choice but to hardsub the subtitles and then convert. Possibly you could try out dpg4x which is able to add subtitles in for you and is actually a pretty spiffy program, though I haven't done a large number of tests with it and I believe it may be lowering the audio a couple decibels, it's fine with headphones.