Google Goggles is a free Android app that tries to identify things are you by using visual analysis and object recognition. Google upped its capabilities this week by giving it the ability to read English, French, Italian, Gernam and Spanish and then translate the text to other languages.
It is intended to translate a couple of words or a phrase. However, I decided to give it more of a challenge. The first time I pointed it at the German text you see in the photo above, it mistook it for a landmark. But, I gave it another try. It recognized it as German text in this round and gave what I considered to be a good attempt at translation. Not perfect, certainly, but good nonetheless. It looks like over half the text was translated into something that seems on track.
Google Goggles 1.1 runs on smartphones running Android 1.6 or newer. I tested it on a Motorola Droid running Android OS 2.1.