They can be hard coded or separate streams, depending on whether they're encoded as part of the video or simply muxed into the same container. They can be mandatory or selectable, depending on whether they can be turned off.
Subtitle Categories There are many ways to categorize subtitles. With a little bit of reading it becomes easy to figure them out. Ironically, for most people subtitles are much easier to grasp than other multimedia elements. Even they're found on nearly every DVD, with the complexity of dealing with video, audio, and menus it's common for people to leave them for last, and often they get ignored completely. Subtitles may be the least understood aspect of digital video.
