A real babel fish?

This link from last week’s Language and words in the news caught my eye; it talks about the idea of a ‘universal translator’, and how difficult it is in practice to produce one (though science fiction has never had a problem coming up with them, for example the babel fish in The Hitchhiker’s Guide to the Galaxy). It also mentions probably the biggest problem with existing translation tools and software – the fact that the translation you end up with is often so literal, that it makes no sense whatsoever. What do you tell your students with regard to these kinds of technology aids, and have you found any that are particularly effective?