Re encoding mkv to avi

What programs do people use to transform mkv soft subs into hard sub avi?

It's being done a lot now with anime to cater for low spec computers.

I only download mkv, but when i wanna put it on my psp it gets converted without the subtitles.

Suggestions for programs that transform mkv into avi while keeping the subs?
I think this may fall under the category of remuxing, but i dont know what that is.

Thanks

Since you're asking for convesion of stuff, check this out.
this

when this happens i use mkvextractGUI to rip the subs and the font used in the mkv.
install those fonts then add the subs manually.
i use this method when Xvid4PSP can't detect the subs.

most of .mkv files is a raw that overlayed by text. this will only works on computer and i've never found it work in portable media after it's converted. another trick is just download screen recorder (usually used for making tutorial) and record the movie.

Extract subtitles and video/audio from mkv.
Hardsub the subtitles onto the video, add the audio, encode mp4.

Enjoy delicious goodness subbed on psp.

I use GOM encoder to convert most of my stuff... and .MKV is supported, it also tells you if the file has subtitles or not, and has automatic presets for coverting it to PSP format... I usually convert my MKV's to MP4 to put on my ipod touch, and the subtitles always worked (or at least i've seen them work)... the only thing is for the first 10 seconds of the video the GOM logo is watermarked at the top right corner, though this fades out:

GOM EncoderGOM Encoder Download Page