DLNA subtitling is extremely rendering device dependent.
There are 2 scenarios, transcoding and not transcoding.
If your renderer supports separate subtitle files try this:
Start with no transcoding (video conversion off).
DLNAExtra should be set.
Turning on both "present subtitle resources" and "present caption resources" is good too. Some renderers do not like this. If you renderer accepts this without crashing it's ok to leave them both on.
You need to have either a .srt or .sub or both in the same folder as the video file with exactly the same name, only different in the extension.
At this point, several renderers will now let you select subs. If your renderer won't, it probably doesn't support separate subtitle files.
The option then is transcoding. To see the subs, they need to be inserted into the video file during transcoding. Most renderers (i.e. PS3) can only display subs via DLNA with this option.
Right now, the subs will only be inserted if you have MPEG2 NTSC conversion set. The subs selected then depend on the subtitle settings in MC. This area is undergoing intense development right now and will be enhanced in the coming weeks.
As far as artwork is concerned, it will be presented as it exists from the databases point of view. If you see the artwork in MC it will be presented to the device over DLNA. The setting "present small artwork" resizes the artwork image to 120x120 which is the size all devices that support artwork are supposed to accept (others accept a wide range of sizes, some accept no artwork).