DVD Flick will do it perfectly.
Not too sure about the subtitles, I've never used them actually. It does support Matroska and AVC at least.
The max resolution for DVD-Video is 720x576, so you won't get HD, but with a HD source like you have you'll get a pretty damn good DVD. If the video is 16:9 widescreen, the DVD will have no letterboxing, it'll be encoded using the full 720x576 and stretched to 16:9 on playback. Any wider than that, and you will get encoded letterbox bars.
/ 
