Popcorn Hour - internal HD very easy to fit. I've got one and it does a good job - plays nearly every format, and has good subtitle support for SRT files. Does a good job with HD - but has composite, S-video, component and HDMI outputs from 480i to 1080p resolutions.
Also the AppleTV hacked to run XBMC is worth looking at - though is SD and low-end HD only really.
Some of the other low-end media players have basic SRT support - you have to ensure a common filename for the AVI and SRT file with the only naming difference being the SRT or AVI extension on many of them otherwise it won't see the file.