It is possible to have titles in the ts stream (e.g., EIA-608 or EIA-708). I donβt know any good free tool for inserting such subtitles into ts stream, but probably Manzanita will sell you something (for an absurd price).
Unfortunately, many HLS players will ignore subtitles because the HLS specification does not mention how to handle subtitle tracks. In your own application, you can test it by finding a ts file that already contains the text EIA-608 / EIA-708 and segments it.
To be honest, I think embedding subtitles in TS is a dead end and it will be easier for you to write your own subtitle screen called by TimedMetadata.
=== UPDATE ===
Starting with version 9 (September 22, 2012) of the HLS project, WebVTT subtitles are supported in HLS. I do not know any tool for preparing threads with them.
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