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From CNET news:
In a move to make videos easier to understand without volume or for the
hard of hearing, YouTube has given users the option of embedding closed captions that show up as semitransparent overlays. Caption files that have text dialogue synced up to the proper timestamps can be uploaded during the time of upload or afterwards, and YouTube has provided multiple language support to let viewers swap between different languages of a single video without having to leave playback.
Videos with closed captioning have it as an option in the lower right-hand corner menu; a part of the user interface that also houses the toggle to turn video annotations on and off. Even with the inclusion of closed captions you can continue to keep annotations enabled, although the two may overlap if annotations have been ledged on the bottom of the screen.
Videos with closed captions appear as on-screen overlays. You can also swap between multiple languages if the video author has provided that as part of the file.
For now closed captions can only be seen on YouTube. Embeds do not yet have the option to have them toggled on, just like annotations are not yet available.
Also, no news yet on if this feature will be making its way to mobile versions of the site, particularly the iPhone application which does not yet have support for YouTube's warp or on-screen annotation features. Considering that the iPod Touch does not have an external speaker built-in, having closed captions on the go could make for a much richer mobile experience.
There's already a small handful of content providers including closed captioning in their videos, including CNET, MIT, and the BBC. Of the bunch I think the most useful is for video lectures, although for non-native language speakers, seeing a video in your own language (if available) is pretty darn useful. If you want to see it in action go check out this episode of Blassreiter which is entirely in Japanese--and awesome.
