Well, VSfilter UniCode supports UniCode .srt files, so no problem there. It'll be a while until it is universally accepted though: basically all the utilities will need to learn how to deal with the new format. As for "reproducing", well, the result is like using Word as your music editor. Not really what you want, is it? I think bitmapped hardsubs are the best way, unless osmeone comes up with some format that is universally accepted.
You can simulate rolling subs by displaying different parts at any moment. I think SubtitleWorkshop lets you "decompose" a line into parts (the Effects menu). However, you need breaks in between, so that lines can be decomposed properly. I know of no utility that does this right now. Maybe you should write one
. Here's an example for "The quick brown fox jumps over the lazy dog":
The quick brown
he quick brown
e quick brown f
quick brown fo
quick brown fox
uick brown fox
ick brown fox j
ck brown fox ju
k brown fox jum
brown fox jump
...and so on
Timed properly, this does what you want. There are sub formats for karaoke (not sure which) that have 2 text colors and show text being colored while the song goes on, but this thread is not the right place to about them. I'm sure there are some knowledgeable people in the parent topic group.