Closed Captioning-Open Source Style?

underwhelm asks: "My partner works for a company that provides closed-captions for all things NTSC. Their current, DOS-based software drags on their productivity, and moving to a fully windowed environment makes sense. This, as you can imagine, is a tiny field. There are only a few sources that have solutions, and they cost upwards of $10,000 per station. Is it possible that, for a similar capitol investment, they could retain some developers and create an Open Source solution to their problem?" Anything is possible...you just have to put your mind to it. Would anyone like to help out? (Hint: your e-mail address would be nice!)

"The program would require certain capabilities: video capture, caption encoding and decoding, MPEG-2 compliance (including various DVD-related abilities such as proper directory structure), and keyboard control of external VCRs.

How broad is current developer support for video capture and editing in Open Sourced OSes? How much of this project already exists in the ether? What would be the magic number of programmers to throw at a problem like this, and is it even feasible for an 'small-cap' company in a non-programming industry to tackle such an endeavor?

One thing that the company has experience in is obtaining grants. Tangentially, are there grants to be obtained for contributing to Open Sourced projects? "