My personal favorite is the frameserver AviSynth. Admittedly, it is all based on scripts, so it may seem daunting at first, but I strongly suggest you look into it. You can easily burn the subtitles using an avs (Avisynth) script, then pass that as an input to an command line XviD encoder - most likely xvid_encraw. You'd then have to mux the audio and video separately using ffmpeg to get the final output.
All this sounds very tedious and complicated (and it is to some extent), but its generally a very straight-forward process.
If you do go this route, an example avs script would look like this:
Using a program like MeGUI you can then pass that script, select one of the XviD presets, select your audio, and hit "One Click". It should burn your subtitles in, mux the audio, and spit out an avi once its done. MeGUI will take out most of the command line work you'd have to do. The only exception is that you'd have to edit the script I've included to fit your video source paths and such.
Links to programs:
(use the x86 version, even if you're x64 compatible)
VSFilter.dll and script:
burn-subs.zip 563k .zip file
EDIT: Oh look, 1000th post Edited by shinigamibob - 12/9/12 at 2:12pm