With a recent update for Nokia N8’s default video player, now its capable of playing the video files with subtitles. You need to put .srt file in the same folder along with the video file (.avi, .mkv, .mp4 etc). Now when you’ll open up the video file it would display the subtitles as shown in the screenshots above.
Some of the people over here asked how to play Arabic Subtitles? You would need to open the .srt file in notepad and save it again using the unicode text file format.