Personally I found that "burning" the alien subtitles worked best for me but I get the idea that Zion wants to keep the image clean. While I can understand why keeping the image clean is important, I was sucessful in putting the alien subs in the lower black bar. Even on a 16x9 TV the black bars are still thick enough to work because Star Wars is a 2.35:1 film. At the time though I didn't have access to the new subtitling tools

I've found a program that should do everything that'll need to be done and can convert betwixt the major formats.

The biggest thing is where they display on the screen and you are correct that there is a different set with different placement of the text for widescreen and Letterbox (for 4x3 tvs.)

I'm assuming there is time to figure all this out. Getting every frame of the film in order and all nice and pretty is the important part. Hopefully if all the frames are present and are in 23.976 timing, the audio and subtitles should fall into place.