A nice solution is using DVDLab for authoring. Doing Project___Project properties you set the TV system (either PAL or NTSC) then you select a template (like Simple (movie only)) , then load the video (M2V) , the audio (MP2 or AC3) ; finally you click on the 'Sub' box, it opens a window which can import four text subtitle types (.sub;.srt;.ssa;.son;*.sst) . You choose the font type and color , you press the 'generate subtitle stream' key and in few minutes it'll turn SRT (and all others formats) --> .SP1.
Just a caution: if your movie is 16:9 and it will be played on a 4:3 TV, turn off the 'Format for 16:9' checkbox or it will appear 'squeezed'.
On http://dvdlab.wikia.com/wiki/Subtitles you'll read some suggestions on the most proper settings , even if my opinion is that the default font [Tahoma 24] is a too big font.
On http://www.videohelp.com/forum/archive/how-to-add-subtitles-to-a-dvd-the-complete-working-guide-t219535.html you'll see that they suggest Arial 22 Thick Outline. But it's you the one which decides. Just make some test, first.
Once it ends, importing it as an 'asset' you can add that .SP1 in the authoring project you're making.
Author your DVD and you'll have your DVD with subtitles. You can also choose to set the subtitle 'on' by default, when you play.
DVD Lab is a nice application with many useful tools.
If hou have TMPGenc Xpress AC3 plugin you can even encode WAV ---> AC3!
If you wist , test it. It works great. If you just need to author simple stuff, the basic version of DVDLab ($99) is enough.
Judge by yourself on http://www.mediachance.com/dvdlab/comparison.html ...