Subtitles are positioned relative to the bottom of the screen. On the DVD, the movie is letterboxed, so the subtitles are positioned "correctly" within the movie image.
But in his example, the subtitle position is terrible in both cases. Imagine if the film weren't letterboxed, let's say it was a 4:3 ratio video that was made for television. The subtitle position would be terrible even in that situation.
The only other option (aside from patching Handbrake) is to have Handbrake use soft subtitles (i.e. don't burn them into the image).
Yes, this. Definitely this.
... Or use just about any program, VLC or otherwise, for playback. I can't think of any decent movie playback engine these days which doesn't have subtitle support built in.
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