Screen Translator is an open source tool which can translate any English language text on your screen (even if it's within an image) to one of 54 other languages.
We launched Screen Translator's setup program, and were asked which program components we'd like to install. Unfortunately, these were listed in Cyrillic: not the most impressive start for a translation program. We selected everything and Screen Translator was installed with no other problems.
Once running, you can initiate a screen capture with a customisable hotkey, or by right-clicking Screen Translator's system tray icon and selecting "Capture". Click and drag the mouse to draw a rectangle around your source text, it's speedily translated to your language of choice, and displayed in a window. You can then simply read this text, or press another customisable hotkey to copy it to the clipboard.
One very obvious limitation here is that Screen Translator only supports English as a source language (you can't translate from another language to English). The Settings dialog does provide an option to choose the "Recognition language", though; it only lists English right now, but presumably that means other languages will be supported soon.
Another irritation is that you can only choose source languages by their two character ISO 639-1 codes, which aren't even sorted into alphabetical order. And so instead of the full name of the country, or language, you're trying to figure out what codes like IS, HR and TL represent. (As ever, Wikipedia reveals all.)
Once we've set everything up, though, everything worked well. Screen Translator uses Tesseract to power its character recognition, and Google Translate to carry out the translations, and we found the results to be accurate and reliable.