There are many roads you can travel to complete a hardsub. This article describes the method I prefer, variations are possible.
What you will need:

Virtualdub
SSA-Hardsub filter plugin for Virtualdub
Aegisub

Using Aegisub for timing and typesetting.
You can import subtitles from nearly every format, even plain txt files. The most important buttons to Aegisub are found in [...]