Barry Welford at Cre8asite Forums stumbled upon a post by Rich Tehrani where Gmail has a feature that translates words on the fly for you, which is especially helpful if you're reading an email within Gmail and need to look up the words quickly.
He explains:
What you are doing is chatting to the bot that does Google translations. So for example if you want to translate from English to French, you add [email protected] as one of your contacts. Then whenever you go chat with en2fr, what ever you say will be translated in the reply from the bot. If you're a frequent user of Gmail, as I am, you may find this a very useful feature. The translation isn't perfect but it often will provide what you're looking for.
As eKstreme echoes, however, the translation really isn't perfect. It will do a basic translation and you'll get the idea of what is being said, but you won't get the best translation. Still, it's a cool tool to use if you're in need of a quick definition.
Over at Search Engine Land, Barry talks more about the features available and encloses screenshots. Additionally, the Google Talkabout Blog has more.
Forum discussion continues at Cre8asite Forums.