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Whoa! I just noticed in #firefox Nightly that if I right-click on some text, I can choose to translate the selection. Neat!
This is powered by Firefox's local translation mechanism, which doesn't ever send the text being translated out over the network. The translation all happen...
If its maintained by Mozilla, then it would be nice if this stays an extension. This makes it easier to uninstall stuff you don't like or what to replace it with another extension doing something similar. Unless it is a core to the system, I prefer to have extensions; if its maintained by the same devs off course. I prefer not to install third party extensions, that's not what I'm suggesting here.
it's available in the current stable version, just behind an about:config flag, will edit this one later on with the one when I get the time to get back on my machine
edit: took a while but I believe it's browser.translations.select.enable that enables it