It seems the version of X11 that ships with Snow Leopard causes some problems with VLC when it comes to videos with embedded subtitles.

In my case, whenever I tried to open an MKV file that contained subtitles, VLC would get stuck while loading the video and never actually play it. If I tried to quit the application, VLC would immediately freeze, so I’d have to force quit. Annoying to say the least.

Luckily it’s pretty easy to fix. Open a Terminal window, copy and paste the following, and press Return (and enter your password when prompted):

sudo chmod a+w /usr/X11/var/cache/fontconfig

Now open your video again and it should work. The first time you try to play a video, it might take a while to load (sometimes a minute or longer), but after that you shouldn’t have any problems. Note that you’ll have to repeat the process after any OS update (10.6.1, 10.6.2, etc.) or security update.

— Originally from http://www.macosxhints.com/article.php?story=20091205001921637