You can try using it with VobSUb, like you use Winavi. otherwise, you have to use something else to embed the subs before converting.(VirtualDub, Avidemux)
Tried VirtualDub, seems great but could not accomplish what I wanted... Not user friendly at all :(
I have .avi sources (movies) and I am trying to convert to .mp4 or .wmv to play on a Zune. I have WinAVI, but it is waaaay too slow for avi to wmv, like 2 frames per second. Xilisoft does it very fast, but no subtitles (not that I could make work, anyway).
The only way I could do it so far was using WinAVI to convert .avi to .avi with subtitles embedded, and then use Xilisoft to convert fast to .wmv.