Well, there's a couple of sides to the issue.
First is Macrovision. It's a "copy protection" that uses the very bottom scan lines, varying intensity that causes the film to constantly change contrast and brightness. So, you'd have to filter that out. Worse case is a completely un-usable picture, and best case is a wierd 1950's television appearance. There's plenty of filtering boxes available for it.
After that, MPEG-2 cards cost anywhere from $35 to $250. The Hauppauge 500-series are pretty respectable, Kworld and ETT make the really cheap-ass stuff. I think Phillips is right down there with them, on some of it's stuff. The capture resolution, frame rate, and audio quality are the differences. Some can't capture MPEG-2 above 320x240, so when you see a card supports "MPEG-1/2/4", it might support MPEG-4 at 144x80@10fps.
Slapping the card in and capturing video is the
easy part.
Subtitles is more complex. I have never made my own subtitles. You'd have to type out the entire script, then break down what text you want to show, and the frames/time that you want it to show. There are tools available to do this, and you just import the thing as a .sub file when you're converting the video into DVD format (MPEG-2 video, AC3/MP2/PCM audio).
DOOM9 is definately the place to go. There are guides for everything that you're wanting to do.