Translate is live in a beta form.
This addon currently translates JP katakana using windower's resources and custom dictionaries. I chose to go this route because relying on game resources is more useful than something like Google translate. While Google translate may get more of the filler words right, it often flubs the game-specific nouns that are necessary to know what the heck the shout is about.
How it works:
When translate loads, it scans over all the resources (and any custom dictionaries) and creates a table that maps JP characters to an EN word/phrase. So 神威 will be translated to "Pentacide Perpetrator" (commonly used in JP shouts to mean DM2), 戦 will be translated to "WAR", and so forth. Then, when an incoming chat packet arrives (say, tell, linkshell, shout, yell, etc.), translate scans the text for characters that match any of the JP characters in its dictionary. If it finds matches, it builds a list of them (organized by length in characters) and attempts to replace them with their EN equivalent in order of longest to shortest (in JP). So "PUP" (か) would be trumped by "Shall we go?" (行きませんか).
As a result, you should expect to see Type II mistranslations of very short JP phrases. For example, one thing you'll notice when you use this addon is a constant stream of "PUP" in JP shouts. It turns out that the symbol for PUP's shortened name (ka) also indicates a question. So they're asking something like, "Shadow Lord do you need it?" but it gets translated to "(darkness)(king) symbolsPUP?"
A few notes:
I'd encourage everyone to accumulate translations (like (watersday)+katakana = Shark Delve) and put them into custom dictionaries (or paste them here). You can submit these custom dictionaries to the repository. With a large enough community effort, we can probably finally make an autotranslate system for FFXI that lets us communicate with JP players.
One common comment I've gotten when people hear that I'm working on this addon has been, "That's nice, but it's a waste of time they'll never invite us anyway." I find this to not be the case. I've not been turned down yet when I offer a job that they are looking for. I've gotten in to a few D BC runs (Shadow Lord / Ouryu / Mithran Trackers / some AAs, and so forth.) I'm not saying the infamous JP xenophobia doesn't exist, but I think it's dramatically overstated.
Future development:
* I'm still looking to add EN->JP translation (again, this is a beta).
* There will probably never be outgoing text support because it would be detectable by the server and shooting out nonstandard characters is the single way that people get reliably banned for windower use.