AltaVista (now owned by Yahoo) has had the Babel Fish translation service since the late nineties. The service, which is powered by a French company called Systran, takes bits of text and translates it from or into any of twelve languages. Entire web pages can also be translated by entering the URL.
The service appears to be down right now and is returning an error. To their credit, though, they didn’t officially launch the service today, people just noticed that it was live and started to use it.
Google has a similar service, Google Translate, although they’ve built their own software to handle some of the translations.