Before I dive into the problems of subtitle translations, let's lay a few ground rules out for subtitles.

In my experience, the shortest subtitle should be a 1-syllable, commonly-used word, and it should be on-screen for at least 20 frames (2/3rds of a second). A words like, "Yes," or, "No," or "Wait!" are the kind of words I'm talking about.

The longest subtitle should be about 64 characters (32 on the top line and 32 on the bottom line) and needs about 5-6 seconds to read. The number of characters is variable since in most fonts the widths of characters are different. A "w" is very wide whereas an "i" or "l" is nice and thin and a lot of thin letters will allow for a few extra letters on the line. I personally think that the word "ill" (as opposed to "sick") was a gift from the gods to subtitle translator's everywhere. Still, 32 per line is the standard, and translators should not go over that limit unless they can see the subtitles in front of them.

One of the main goals of subtitle translating is: Although DVDs come equipped with pause buttons, your translation shouldn't force the viewer to use it. The director and editor spend a long time in the editing room trying to perfect the pacing of the show, and the translator shouldn't be the one to ruin it.

So you want to eliminate anything that slows down reading where possible. Characterization trumps this rule, so if there is a short word that the character would not say and a long, hard-to-recognize-quickly word that the character would say, then the long word wins.

But in every other way, pare down the sentence so that it is as short and easy-to-read as possible while containing the same information. (There are exceptions to this last rule. Polite Japanese says a little with a lot of words. Having a short subtitle while the character goes on and on will make the viewer think that something is being left out. In these cases, it's permissible to expand, "Thanks," to something like, "I'd like to express my most sincere gratitude.")

If you are faced with a multiple-subtitle sentence, you should break the subtitle at natural phrase breaks. In other words, try not to break the subtitle between the subject and verb, or between verb and object. Aim for breaking between the main sentence and prepositional phrases or subordinate clauses.

In a nutshell, generally speaking the rules are, short is better than long; simple is better than complicated; and since people tend to read words as a unit rather than letter-by-letter, whenever possible, do not hyphenate.

But there are a lot of sentences where long words appear right in the middle of the sentence, and that's where the translator's trick of inverting the sentence comes in.

Take this sentence:
In the king's problems with insurgency, will many heads roll?

That's 61 characters, so it should fit into a single, two-line subtitle just fine. The problem is that when you break it without hyphenating, you get:
In the king's problems with
insurgency, will many heads roll?

The top line is 27 characters but the bottom line is 33. (We lost a "space" character when we broke the line.) 33 characters is too long, so let's try it the other way.
In the king's problems with insurgency,
will many heads roll?

Now the top line has 39 characters.
In both cases we're still over the limit. So now the trick of inverting the sentence.
Will many heads roll in the
king's problems with insurgency?

And magically, the bottom, longer line drops to 32 characters, and is now within the limit. Of course it doesn't always work, but it's a tool in the bag for subtitle translators.

(The same trick can work in manga where you want to get long words to the middle of the sentence.)