I tried the localized version of WP. Ir is well done but I'm lost in the translated dashboard and i went back (i localized by hand the date strings...). I mean why translate the admin interface? It will add only confusion.
One solution would be to have a full translation and a partial one but it is not easy do separate the user part of WP from the admin part.
How about cutting out the localization functions from the basic Admin menu for a start?
I cannot sleep well at the idea that somebody sooner or later will translate plugin in italian :-)