TEs seem to have complex regulatory functions and contribute to the coding regions of many genes.
The proportion of proteins with TE-encoded fragments (approximately 0.1%), although probably underestimated, is much less than what the data at transcript level suggest (approximately 4%). In all cases, the TE cassettes are derived from old TEs, consistent with the idea that incorporation (exaptation) of TE fragments into functional proteins requires long evolutionary periods.
References
Gotea V, Makalowski W. Do transposable elements really contribute to proteomes? Trends Genet. 2006 May;22(5):260-7. PMID: #16569458#