No they are ok. Even managed to watch the movie they belonged to on my PC.
OK let me elaborate why I need this (didn't think I'd need to, but seems like it will help you understand better):
The subtitles are in Hebrew. The players on my PC (WMP, PowerDVD) are able to display them properly with the film. The problem starts with my DVD player: It accepts divx + srt files, but hebrew subtitles confuse it - it displays them reverse (as they are right to left). Now there are utilities that reverse them, but they don't always work properly. Besides, I can't view the burned DVD (that includes the avi and subtitles) on both DVD player and PC afterwards - as one of them will always show the subtitles reversed. So - embedding them in the movie will solve both problems.
This is BTW a problem for many people here. Thought I'd have the chance to solve this problem not only for myself.