In order to use V Dub Mod for subtitles you will also need VobSub (free too), after installing it you open V Dub and then Video and then Filters then Add and finally load and go to the VobSub folder and load both the txtsub.vdf (srt) and Vobsub.vdf (sub). From that point on you will be able to select either one from the filters menu and add your subtitles. You can only use the filters option if you are reconverting the avi so it takes some time but if the avi has VBR audio you can use this opportunity to change the audio to CBR as well (more compatible to dvd conversion but can cause sync problems so you can ignore the vbr warnings if you don't plan on converting to dvd).