Google now allow you to translate from and to dozen of languages using any XMPP client (including GTalk of course).
Add [src language]2[dest language]@bot.talk.google.com
to your GTalk contacts and bingo — you’ve got your personal machine interpreter.
For example en2zh@bot.talk.google.com will translate from English to Chinese.
The quality of translation looks pretty good in simple tests (I tried English to Italy).
The following language pairs are supported:
ar2en, bg2en, de2en, de2fr, el2en, en2ar, en2de, en2el, en2es, en2fr, en2it, en2ja, en2ko, en2nl, en2ru, en2zh, es2en, fi2en, fr2de, fr2en, hi2en, hr2en, it2en, ja2en, ko2en, nl2en, ru2en, uk2en, ur2en, zh2en.
Nice work Google.......