Ok here goes,
did a clean install of windows 7 for various reasons so now to get TVersity playing .srt subtitles on normal avi files again.

Disabled Windows Media Connect Network Sharing service
Installed ffdshow x64 and the normal ffdshow
used Win7DSFilterTweaker to make the ffdshow filters the active ones
Installed TVersity without the codec pack

Now is i stream an avi to my PS3 it will not show subtitles, if i play it on windows media player it will not show subtitles.
HOWEVER if i load the file in graphedit and play it there it will show the ffdshow filters + play subtitles same thing in the classic windows media player.

Any ideas?

EDIT:
If i install directvobsub i will get 2 sets of subtitles in both wmp and mpc however still none in tversity.