Add subtitles to an AVI?

[ambrosechapel]

I believe I should be able, with VLC, to take an AVI file and a subtitles file, and create another file with the subtitles permanently added on top of the video.

Is this right?

I searched this site a while ago and I believe the ability to do this was somehow missing in the most recent VLC for OS X, but available in a beta which only ran on Tiger?

Any tips on how to do this will be very gratefully received.