Kip Kniskern at Liveside has the details on an unannounced beta of Windows Live Translator as dug up by blogger Darren Straight. The beta is powered by Systran and is just what we have come to expect from machine translation – not too good. As an example, try translating the Stern home page from German to English. You sort of get the idea, but it is no substitute for a real translator.
Ionut Alex Chitu has more background on Systran and indicates that the translations seem to be better than those offered by Google or Babelfish (from Altavista owned by Yahoo) which are also sourced from Systran, so presumably Microsoft licensed a newer version of the code. He also indicates that there is an option to use Microsoft developed machine translation code, but I did not spot it while I was kicking the tires. Machine translation is a holy grail that many have searched for and never found, and I don’t think Windows Live Translator adds much to the quest.