As their announcement makes clear, it's a very easy to use API with two main functions: language detection and language translation. The language translate() function just needs a string to translate, the source and destination languages, and a callback function. The detect() function takes a block of text and a callback.
Since language detection is very hard problem and not always perfect, the API provides two useful properties of a true/falue value "isReliable" and a 0-1.0 "confidence" value which together give an indication of how certain the language detector is in each case.
For some ideas on what uses this can put to, check-out our listing of 7 translation-related mashups in our directory now. These include the mashup shown below, Universal Chat Translator for Skype (download here), a plug-in built on the Skype API that translates chats in real-time:
Note that the API documentation makes it clear there are more features coming before long: "We plan on adding more exciting capabilities to the AJAX Language API in the future, so stay tuned."