The best part of the service is that it doesn't use Google Translate, which is good for small things, but is usually pretty bad for context (as are all machine translation services). So, Google has made it easy for developers to get their apps translated by professional humans at a very reasonable price. If you have a small app, it will cost you an average of about $75 per language; and, larger apps will cost an average of about $150 per language. The translators will even help you out with your app listing details and the app graphics.
Google says the pilot program for the App Translation Service went well. The Zombie Ragdoll developer translated its game into 20 different languages, and found that now 80% of installs come from non-English regions. So, given the markets that you could access with a well translated app, that's a pretty solid cost for what could be a pretty complex job.
source: Android Developers Blog