I will tell you what was my "fix" to the subtitle issue:
1. Change all extensions files from mkv/avi to m2ts. This force to use mplayer instead of xine, you will win some and lose some also, life fact,
1.a You will lose functionality on Remote control.
1.b You will not see any more the green artifacts on the left side of the screen.
1.c Finally you will get the subtitles that you are asking for.
2. Read carefully the man pages for mplayer, you will find valuable information how to proceed.
3. Look for the file subtitle.ttf an copy it to /root/.mplayer/
4. Modify the /root/.mplayer/config to you match what do you want about fonts, size position on the screen, etc.
5. Your subtitle files must match the name of your video up to the extension and the extension needs to be srt, at least this worked for me, I haven't another suffix.