I found the following instructions online which look pretty promising....
13 Jan 2008, 02:28
After a few hours of googling, and turning up pretty much nothing; I figured I ought to make a note of this somewhere. . My Xbox is hooked up to a NAS box which has all my music/tv/movies on it, and this box runs a /very/ minimal install of ubuntu - ~150mb in total.
So, down to business. You'll need transcode installed, along with mplayer, then it's a simple case of:
transcode -i videofile.avi -x mplayer="-sub subfile.xxx" -o outputfile.avi -y xvid
There are other output formats, but I use xvid, since it's supported by the Xbox. It takes a while longer than just straight transcoding, but it's worth it to not have to watch it on my laptop.
I installed transcode. I opened the terminal and input the line above using the movie file and then the subtitle file and then "subtitledleolo.avi -y xvid" at the end.
I'm probably not doing this right? Also, the instructions do not allow for specifying the language choice within the .sub subtitle file. How is that done?