Google announced they closed the loop on features for Google Translate by adding in a Google Goggles feature to the Translate App.

You can now take a picture of something, brush your finger over the words in the picture that you want to translate and Google will use OCR technology to convert the words in the picture to character and then translate them. You can even have Google speak them in either language if you wanted.

It is available on the Google Android Translate App. Here is how Google describes it:

Here are pictures:

Forum discussion at Google+.