How do I convert an .mkv video to iPad format with subtitles?
I know relatively easy and free way that I will share


Subtitles have to be converted to SRT format. You may do that with Jubler.
Then I'm using Handbrake to convert to h.264 with soft subtitles. Here is the guide.
Alternatively you may use MKVTools to convert video without reencoding (in case it's already in h.264) to save time and after that add subtitles with Subler. You may try to import SSA subtitles (I don't have such on hand now to check if SSA will work with Subler so please report back if it will)