episode ripping with subtitles

so i have an anime dvd that i want to rip into episodes, while keeping the subs, that way i can have english and japanese audio with english subtitles. so what would be the best way to do this?

here's what i know:
-all the episodes are in one PGC file
-each episode consists of 5 chapters each

what ive tried:
-rip in file mode (lost subs)
-rip entire PGC (how to split episodes after conversion?)

so, im stuck. what program/method will work best? i have lots of conversion programs available, so dont worry about that. i would like to go into .avi, .ogm, or .mkv. any one is fine, i just know that ive seen the best, highest quality anime episodes in those formats. ive been fighting with this problem for a week and want to get done.

so, if i do option 1 will the subs be kept? cause i would prefer that they remained intact. option 2 sounds good but i dont really like virtualdub. its a little difficult to use for a beginner like me. which means option 3 sounds way beyond me. ill try option 1 and see how it turns out. thanks for the help.

so i cut the episodes out with DVDShrink like you said and they have the subs, so thats all good. the only thing now is, i wanted to leave out the opening and endings, but there was a preview of the next episode after the ending, that i also cut out. should i convert everything and then combine the output avi's together? my guess is that would be the easiest way, so thats what im going to try. what program does just an avi combine with no compression? i dont have a program to do that, at least, i dont think.