I get this question asked by my website members and on my forums all the time, so I have done quite a lot of research into this, although I cannot claim to be an authority on it.
Closed Captions are a different subtitle technology (very old and widely adopted in the US) to normal DVD subtitles - Whether or not it contains contextual information ([phone ringing] etc) has nothing to do with it.
Closed Captions need an external decoder - no question about this. in the US they are built-into 99% of TVs. In the UK they don't exist in TVs. You can get CC decoders for CCs on PAL VHS tapes but I have read that they don't work with NTSC closed captions on DVDs.
I have also seen "Closed Captions" options on DVD players. Either they are incorrectly labelled, or these are simply another switch in addition to switching them on/off on the TV or external decoder. You still need an external decoder, either in the TV or separate.
To add to the confusion, especially in the US, some major DVD studios incorrectly refer to contextual subtitles (aka "subtitles for the Hearing Impaired") as Closed Captions, when in fact they are simply normal dvd subtitles with contextual information.
For more information, check out the thread here:
http://www.rnid.org.uk/ubb/Forum1/HTML/004017.html
There are a couple of subtitling professionals posting on that thread to clarify things.
Cheers,
Mat.