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Thanks. vlc-0.9.0-svn-20070717-0000-win32.exe displays the hebrew subtitles correctly.

I installed vlc-0.8.6d-win32.exe from branch-20070726-0330/

Unfortunately, the answer is positive: the hebrew subtitle is displayed as described above.

The problem above ("the last letter of every paragraph is displayed at the start of the paragraph") continues also in VLC 0.8.6c -wxWidgets interface on XP. To explain it, let A,B,C,D,E,... represent hebrew characters. If the subtitle that should be displayed, from right to left, is EDCBA ...