QuestVisual has just released Word Lens, a standalone £2.99/$4.99 iPhone app that uses optical character recognition (OCR) to identify words in images, and then translate them. The app exploits well-known technologies -- OCR and dictionary translation -- but the way the translated words replace the originals has a magical effect, as demonstrated in the company's promotional video (below). This "augmented reality" aspect makes it different from Google Goggles for Android phones, which has OCR but uses Google to provide a plain text translation.
Word Lens will not have wide appeal at the moment because it only handles English-to-Spanish and Spanish-to-English translation. Support for French, German and Italian would obviously widen its scope. Support for languages that don't use Latin characters, such as Arabic, Chinese, Japanese and Korean, would be a real breakthrough but is far from simple.
Also, the translations are basically word-for-word, which should work well with road and shop signs, menus and other things that travellers often need to translate. Translating prose is, again, a bigger challenge.
QuestVisual's app might not change the world, but it provides a glimpse of a future where some of our science fiction dreams could actually come true.
https://www.youtube.com/watch?v=h2OfQdYrHRs QuestVisual's Word Lens demo