How to re-encode / merge subtitles?

[okorkie]

I know this question has been asked numerous times, and after googling for a few hours, I'm not having any luck merging subtitles into a avi file. Here is some background information:

- I'm using the VLC 2.0.5 on Windows 7
- I have a video file called myvideo.avi and I have a subtitle file called myvideo.srt (these work together just fine when played back on VLC)
- I want to be end up with a single file with the exact same audio / video codec / container rates, but with the subtitles included in the final .avi file
- Here is what I have tried:
o Media - Convert / Save. Then under the 'File Selection', I have opened up 'myvideo.avi'. Then I have checked 'Use a subtitles file' and have opened 'myvideo.srt'. Then I clicked on 'Convert/Save' at the bottom of the window.
o In the next section under the 'Destination', under 'Destination file', I have clicked on 'Browse', then navigated to the folder I would like to save in and typed 'myvideo-engsubs.avi' (PS - I have used a similar method to extract MP3 audio from flash files without a problem).
o Then under 'Settings' in the 'Profile', I have tried to create a custom profile for this process and I can't get it to work (I have tried all different combinations for the custom profile)

As mentioned, all I want to do is add / merge the 'srt' file to my 'avi' file and end up with a single file that has subtitles included so that I can playback to other devices or programs besides VLC. I want to maintain the original audio and video codecs as well as bit rates.

Any help is greatly appreciated. Thanks in advance!