Good news for people who use Windows Live Messenger as the team has
released Tbot, WLM bot which supports like 10 languages as of now and
will help you to chat with people around world with different
languages. You will have to add mtbot@hotmail.com to your contacts to enable the translation.

The languages supported are

• 0 Change source language
• 1 Arabic
• 2 Chinese Simplified
• 3 Chinese Traditional
• 4 Dutch
• 5 French
• 6 German
• 7 Italian
• 8 Japanese
• 9 Korean
• 10 Portuguese
• 11 Spanish

The number beside them will act as key when you want to translate. Moreover from the news at MSR-MT blog: It seems now that all translation has gone in house and being supported via Windows Live Translator, the offical web site of Microsoft for Transaltion.

I wish there could be some way it could have auto detected the
language of the message being sent from some one. Sometimes its hard to
detect the language itself. I wish this feature gets added soon.