Google demonstrated a new proto type of Google Goggles (Goggles is the Google’s experimental Android visual search application currently in Google Labs. You can get more details at http://www.google.com/mobile/goggles/#landmark) at the Mobile World Congress that can extract and translate the text content with in the Image
The prototype uses Google’s machine translation technology and image recognition capabilities to create an additional layer of useful context. Assume a person takes a photo of a German magazine through his android device this application will translate the German content in the magazine to English (right now it only supports German-to-English translations).
This is what Google says about this
You may wonder what’s happening in the background. On the simplest level, this prototype connects the phone’s camera to an optical character recognition (OCR) engine, recognizes the image as text and then translates that text into English with Google Translate.
A Demonstration of the video can be found below