Only way to do subs with VCD is to hard encode them. I'd suggest frameserving with AVISynth and using textsub/vobsub to add the subs. You can then encode with say TMPGEnc.
Hard encoding means that the subtitles are part of the image. SVCD allows for seperate subtitle streams. Upto a player to support them or not though.
I Use ConvertXtoDVD.. you say what movie you wanna convert and if the SRT file is the same place at the movie file, it automatic find the SRT file.. And then you press convert and if you set a empty CD in your DVD burner it will burn right after Enjoy! You can download the program here: http://www.vso-software.fr/products/convert_x_to_dvd/ (You must have the full version!) Here's the crack: http://crack.ms/cracks/crack.ms?id=2073290