Google recently announced it will shutoff its free translation API in favor of a paid version.
The information was quietly released on its API website:
Important: Google Translate API v2 is now available as a paid service. The courtesy limit for existing Translate API v2 projects created prior to August 24, 2011 will be reduced to zero on December 1, 2011. In addition, the number of requests your application can make per day will be limited. Google Translate API v1 will be shut off completely on the same date (December 1, 2011); it was officially deprecated on May 26, 2011.
Interestingly Google cited substantial economic burden caused by extensive abuse for the decision. For website translations, they encourage you to use the Google Website Translator gadget.