Joomla 1.7 includes a basic way to implement a multi-language site.

This feature does not work as an association-type display where each content, whatever it is, has an equivalent in another language.
In 1.6 the module is set to redirect to the Default Home page for each content language.

In 1.7, was introduced a new feature that lets associate menu items to other menu items in different languages.
In this case the Language Swicher module will redirect to the associated menu items.
New in 1.7 - Associated menu items

It does not replace other multi-lingual managers extensions such as Joomfish.

This feature could be described as a way to create a Joomla multi-site filtered and displayed by language, rather than a pure translation oriented site.
One could create the same site structure on a monolingual site. The difference is that the Interface as well as the display of different menus and modules would not be language dependent.

This demo site lets you access to the back-end of the site in one of the languages proposed so as to understand how such a site shall be structured.
You just have to log here (log) and use the name/password for the available administrator language of your choice.

Languages proposed for now, are :

English (en-GB)
Name : multidemo_en
Password: multidemo_en

Français (fr-FR)
Name: multidemo_fr
Password: multidemo_fr

Español (es-ES)
Name: multidemo_es
Password: multidemo_es

Deutsch (de-DE)
Name: multidemo_de
Password: multidemo_de

Italiano (it-IT)
Name: multidemo_it
Password: multidemo_it

Македонски (mk-MK)
Name: multidemo_mk
Password: multidemo_mk

தமிழ் (ta-IN)
Name: multidemo_ta
Password: multidemo_ta