I originally tried to do it with Quicksilver & Google Translate. It was possible for most of what I wanted to do, but not all. In the end I found it quicker & easier to use LaunchBar with Google Translate.
With this it’s possible to translate selected text to you native or a different language, translate full web pages, & also write text in one language then translate it into another.

A few people asked me how to do this so I whipped up this video (I went slower than normal so it’s (hopefully) clearer what’s happening).

View the medium size version here, or download the large version here.

What might not be clear with the keys pressed shown on screen is that I press & hold ⌃Space to invoke LaunchBar which also brings the selected text into LaunchBar (only shows the ⌃ (CTRL) key), & I use ⌥Space to invoke Quicksilver. (For some reason ScreenFlow doesn’t show the space bar). I also use ⌘L to select the URL in Safari’s address bar before hitting ⌃Space to send it to LaunchBar when translating web pages.

To see how it looks at normal speed view the medium size version here, or download the large version here. Once you get used to it translating things becomes very quick & easy.

Here are the search template URLs for LaunchBar:

French to English

http://translate.google.co.uk/translate_t?hl=en&sl=fr&tl=en&q=*

Italian to English

http://translate.google.co.uk/translate_t?hl=en&sl=it&tl=en&q=*

Japanese to English

http://translate.google.co.uk/translate_t?hl=en&sl=jp&tl=en&q=*

Portuguese to English

http://translate.google.co.uk/translate_t?hl=en&sl=pt&tl=en&q=*

Spanish to English

http://translate.google.co.uk/translate_t?hl=en&sl=es&tl=en&q=*

German to English

http://translate.google.co.uk/translate_t?hl=en&sl=de&tl=en&q=*

English to French

http://translate.google.co.uk/translate_t?hl=fr&sl=en&tl=fr&q=*

English to Italian

http://translate.google.co.uk/translate_t?hl=it&sl=en&tl=it&q=*

English Japanese

http://translate.google.co.uk/translate_t?hl=jp&sl=en&tl=jp&q=*

English to Portuguese

http://translate.google.co.uk/translate_t?hl=pt&sl=en&tl=pt&q=*

English to Spanish

http://translate.google.co.uk/translate_t?hl=es&sl=en&tl=es&q=*

English to German

http://translate.google.co.uk/translate_t?hl=de&sl=en&tl=de&q=*

French web page to English

http://translate.google.co.uk/translate?u=*&sl=fr&tl=en&hl=en&ie=UTF-8

Italian web page to English

http://translate.google.co.uk/translate?u=*&sl=it&tl=en&hl=en&ie=UTF-8

Japanese web page to English

http://translate.google.co.uk/translate?u=*&sl=ja&tl=en&hl=en&ie=UTF-8

Portuguese web page to English

http://translate.google.co.uk/translate?u=*&sl=pt&tl=en&hl=en&ie=UTF-8

Spanish web page to English

http://translate.google.co.uk/translate?u=*&sl=es&tl=en&hl=en&ie=UTF-8

German web page to English

http://translate.google.co.uk/translate?u=*&sl=de&tl=en&hl=en&ie=UTF-8

To add the search templates invoke LaunchBar & hit ⌘Y to open the configuration window. Click on Search Template & add new ones with the above URLs.

Any questions on how to do anything in the video let me know. It is possible to translate text using Quicksilver (not web pages though), but there’s a few more steps involved so I prefer to do it using LaunchBar. Let me know if anyone’s interested in learning how to do this with Quicksilver.

Update:
Don McAllister of ScreenCastsOnline has featured this tip in his latest screencast. It’s a members only (paid) screencast, but you can view his part on translating using LaunchBar in HD here, & iPod/iPhone res here.