You haven’t listed what version of DVDFAB you’re using. I assume that it’s the Platinum version.
This is the screen you should be at:
Select one of the titles in the list
Check the "Display only forced subpicture"
Then click “Next”
Select the “Configure” button
This screen is where you make any changes that you’ll need. I’ve always started with the default and made a couple of changes, i.e. with the bitrates I’ve found that 900 MBps for video and 128 for audio is pretty good for the iPod. I also use 150% for the volume level. Look over the other settings and give them a shot.
Click the “OK” button then hit the “Start” button.
Dunno if this helps.