Captioning Media for iTunes requires some specialized tools and a bit of time to get right. Sadly, this process can only be done on a Macintosh system so far, but as means and methods emerge for PC based solutions, they will be added.
Presumes existence of:
Open Compressor and drag/drop .mov file to workspace.
From the Settings window, select the appropriate H.264 output setting. For iTunes this is traditionally 320 X 240. Drag into the MOV file (where indicated). More than one output setting may be used.
Next, select Target Destination (Specify output location)
With MOV file selected, Open Inspector window. Click on tab "Additional Information". Click "Chose" and select SCC file then click "Open".
(If so desired, also add additional info such as copyright, publisher, etc by clicking on "Add Annotation" button then click "Save".)
Click Submit. Specify output settings for Name and Location. Click submit. Depending on length of source MOV, this may take quite a few minutes to finalize.
Note: Processing status can be monitored in the History window. By limited experience processing can take roughly 6 minutes per 1 minute of video - this can be effected by processor speeds and other variables.
NOTE: These steps must be followed in exactly this order or else your captioning efforts will be lost.
To use Quicktime Pro you will need the ClosedCaptionImporter from the apple website at: http://developer.apple.com/samplecode/ClosedCaptionImporter/. Downlod the .dmg file and copy ClosedCaptionImporter.component from the .dmg file to /Library/QuickTime.
Load source MOV into QuickTimePro. Select window Menu Show movie properties.
Click on the video track and click the visual settings tab. Size the movie for the iPod (640 X 480)
Choose File menu Export and then select Export setting: Movie to iPod. Save file (.m4v)
Open the new .m4v file in QuickTime. Next open the .SCC file in QuickTime. Select all of the text ( A) and then copy to the clipboard ( C).
Return to the main video (.m4v file). Ensure that the play head is at the very beginning of the movie. Select Edit Add-to-movie.
Reset play head and check view menu to ensure that Captions are turned on.
Save movie and test. QuickTime will save the file as a MOV file, however the captions will appear in both iTunes and the iPod/iPhone appliance.