All you need is install kmplayer and mplayer packages for extras-testing. Widely recognized mplayer is ultimate media player for Linux with built-in support for subtitles in plain txt format. Kmplayer is just a front-end for mplayer - quite rough, to be honest - but since we're planning to watch movies, not an UI of a player, it should not be an issue.
Having both applications installed basically concludes this solution. Playing any divx file with associated subtitles file (ie. FancyMovie.avi & FancyMovie.txt both in same directory) should make subs appear automagically.
Making sure kmplayer uses correct backend player
Open up kmplayer's options menu, get into 'Select Player' option and make sure mplayer is chosen there.
National characters not appearing in subs correctly
A little X-Terminal trickery is required here, not much tough. You need to know encoding of subtitle file, for example most of Polish subtitles are encoded with windows/cp-1250. That needs to be added to mplayer's config file located at /home/user/.mplayer/config in following manner:
or perhaps using a single command in X-Terminal:
echo "subfont-encoding=windows-1250" >> /home/user/.mplayer/config
Now go and enjoy subtitle-powered movies on your shiny N900. :)