Sometimes it works really well. Especially for sites that are in French or Spanish, it does a great job, and there a few grammical errors. However, Japanese is another story.
Here is google's attempt to translate a Japanese page talking about the new AMD Phenom chip and upcoming presentation:
"On July 26th you go away, at the AMD American head office coming after the demonstration which is released to for the analyst, the United States, it is quicker than the country of everywhere, releases in Japan. AMD Phenom of 3.0GHz TM FX, soon RD790 of announcement schedule (the code name) demonstration of the luxurious specifications which load chip set, and up-to-date graphic card and HD 2900 XT it does not flee!"
Does a computer translate this? Or did they just hire RegalSin to type it?
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