Launch the software and open your DVD with it (click on the VOB button). Next, choose the format. I just do Text subs via OCR and save as .SRT.
Then click "start".
Now, the software will process the DVD. It will ask you to fill in some characters. Make sure you take not of Italics and such. Type in the correct character as it pops up.
At the beginning, it will ask you a lot, but as you go on, it will ask you less and less. It ususally takes about 10 minutes to finish a movie.
After this, go to "corrections=>post OCR Spelling correction" and click OK. Then you can save your subtitle.
Launch MKVMerge GUI. Drag and drop your avi file and then your subtitle file on the program. Then press "start muxing" and you are done.
If you want to add chapters you can do so in the chapters tab. If you do so, remember to load them in the Global Tab otherwise, they will not be muxed in. You would create the chapters, save them as .xml, then go to the global tab and add the file there using the browse button.
The advantage of matroska files is that you are not re-encoding the video, so it stays the same quality! Also, soft subs are the same as subtitles in a DVD, meaning, you can turn them off if you like. You can also add audio streams, more subtitles, other video angles, etc...
To get the best out of .mkv files (and most other video files), download & install CCCP and use Media Player Classic.
