Just updated to 2.0.0 on Arch x64, and things subtitle-wise are not much better. They still look much less grainy on SMPlayer, though I may be able to mitigate that at least partially by fiddling with the settings (though ideally this wouldn't be necessary).
But trying VLC out reminded me of a few more issues:
* Activating the controls while in full-screen mode (by hitting the bottom of the screen) is temperamental
* There's a lag after unpausing the video before audio starts playing again. Not functionally relevant, but it drives me nuts.
VLC can use libass also for subtitles. I don't believe this is the default way it's shipped in most linux distros however.
Once it's added in and the plugin is enabled however It does do it just as well as mplayer. This is one of the reasons that I like gentoo on my desktop. It makes getting some of these things nearly trivial once setup.
Edit: also displays subtitles a lot better.