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The gold standard for the i18n community, as far as UNIX (and consequently PHP) is concerned, is the use of the Gettext project. This is a set of GNU tools designed to help translate text strings on the fly, from one language to another.
Gettext works by extracting text strings from source code files, and storing them into message catalogs. These catalog files are stored into a directory structure that is standardized, and the translated string is looked up at run time. If the translated text string is not found, or doesn't have a translation available yet, the original one will be used instead.