Use MKVExtractGUI to extract video, audio and subtitle from MKV files.
Then, you can multiplex (join) all those elements together with VirtualDubMOD.
MKVExtractGUI:
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http://corecodec.org/projects/mkvextractgui/
VirtualDubMOD:
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http://virtualdubmod.sourceforge.net/
I suggest once you save the completed video in VirtualDubMod, save it as XviD
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