Subtitling, for those who don't know is the process by which fans translate "raw"(or plain Japanese) anime episodes, and put the translations(subs) on the bottom of each episode. It can take from as little as a few hours to a few months to subtitle one episode. Subbing usually involves obtaining the raw, translating, editing, timing, and putting the subs to the raw(or encoding). There is usually one person for each job to make it easier and faster. I have a lot of experience with all aspects of subbing, and since many people have emailed me about subtitling, I have added a step by step guide here.
Obtaining the raw
There are many ways to obtain a raw episode. One way is of course, your local anime store. Chinatown is a great place to check out, as they have tons of raw stuff for cheap prices, to boot. If you're looking for raw anime on DVD, AnimeJungle is a nice place to check out, as well as CDJapan. If you still can't find the raws of the series you need, check out Ebay as a last resort. I recently bought the entire Hunter X Hunter series on DVD there ^^
Translating
Translating is perhaps the toughest part of subtitling. To translate of course, you need a fluent Japanese speaker, which are very rare these days =( If you or someone you know knows Japanese, all you have to do is basically translate each piece of dialogue from Japanese to English, so anyone can understand what is going on. Translations can be typed, written, etc.
Timing
Timing is usually the next step to subtitling. To time, you will need Substation Alpha, which you can get here. I don't really have time to explain all aspects of timing, but there should be a guide/tutorial on that site that will teach you the basics. If you have any questions, email me.
Editing
Once you timed the script and put the translations on the script, you need to edit it. Ask someone who has very good English grammar to check over the script to make sure there are no grammar, spelling, diction, verbose, translating mistakes. If you want to make your translations absolutely perfect, have another Japanese speaker look over the translations to fix any errors. ^_^
Encoding/Putting Subs on
Once you're done with the editing, you will need to encode the episode. To encode, you can either use VirtualDub, or Nandub. There are other tools, but these 2 are the most widely used in the digital fansub community ^^. There are some guides on how to encode on Doom9.
If you have any questions, please do not hesitate to email me.