Word Lens is similar in functionality to Google Goggles, which also lets you translate words within an image. Word Lens, though, has a leg up on its competition as the image processing and translating is done on the phone, in real-time. Google Goggles relies on Google's servers for the translation, which slows down the translation time and requires you to have an internet connection.
Word Lens is now available on the App Store for you to try. The core app is available for free, and language pairs (English/Spanish) are available as an in-app purchase. At launch, the app only supports English to Spanish and Spanish to English translations. Additional languages will be added in future versions. If you don't want to buy a language pack, it is worth a download as the app includes two demo modes. The reverse mode will reverse the letters in an image, and the erase mode will white-out the words.
Word Lens requires iOS 4.0 or later and a video camera. It is compatible with the iPhone 4, iPhone 3GS or the 4th generation iPod touch. You can see Word Lens in action after the break.