In the Manhattan SC book it says that Urge is a subjunctive word that follows the That + Infinitive form.

However, in everyday speech I hear I urge that you xxx. Should it be I urge that you????

I hear I urge you to....

Look at the examples right up above that explanation.

eg, one says "It is urgent that SHE sign..."
or "I ask that HE be..."

The book isn't saying you shouldn't have a subject before the subjunctive verb form. It's just saying that, if you have the word THAT, you need to use the subjunctive tense afterward. (As opposed to, say, "I urge you to go to work" - there, I'm using the full infinitive "to go.")

I urge that you study hard tonight.
Study is in the "infinitive minus to" form (to study)

I urge that you tell all your friends about MGMAT. ;)
"infinitive minus to" (to tell)

Ok so when people say - I urge you to..... Is that incorrect or correct?

Thanks!

You can use "I urge you to" do something, yes.