Is there an App that can rip subtitles from MKV files, or a software that will convert mkv to xvid and keep it's internal subtitles?
You can use mkvextract to demux subtitle streams. As for mkv to Xvid. mkv is a container, Xvid is a video codec. You could for instance have an Xvid video stream in an mkv container. Perhaps you meant an Xvid avi? AVIMux GUI can mux subs into an avi, not much point though since external subs give better compatibility.
Well thanks, I know it seem pointless but it's for web streaming, I need two different version (Sub and Dub)
Yes you can use the AllToAvi software you can get it here http://sourceforge.net/projects/alltoavi/ just drag and drop the file, just remember when converting to add the subs you want on the subs box.