Your question shows your lack of knowledge . Xvid is just a codec, what you're looking for is a video editing program that can handle the video container in which the video stream is encoded to using Xvid. Usually virtual dub is sufficient. As long as you have a Xvid decoder installed , it will always be able to handle the video ( unless you're dealing with the mp4 and mpeg containers ). Now as for merging , both video streams must have the same resolution AND same FPS. As for adding subs ( aka : hardsubbing ), you can do that by using the Textsub filter, which is within the vobsub package ( you have to download that seperatly ).
Yours,
-E
Yours,
-E