I have a similar problem, for me only when Deinterlacing is enabled the subtitles are in the middle of the screen. They are fine when it is disabled.
using VLC 0.8.4a for beOS
This problem interests me greatly, I have a much lower end system (VIA C3 800+radeon 7500) and I have the same slight stuttering when playing DVD's. (in win2k, and in BeOS, any version of vlc) Now the interesting bit is that powerdvd plays them with no problems, which leads me to suspects that there...