I use DNN localization a lot... since the main site I'm working now has Portuguese and English...
For the normal Dynamic HTML content I use the Ealo module, you can download it at codeplex for free: http://ealo.codeplex.com/
There's another module from Ealo that allows you to localize the menu (TAB names)...
There's some changes you need to make in you web.settings file but everything is explained in the guides!
A part form that you only need to activate another language in DNN, add a pack or something and when you use the flags (make sure your skin has the language token) you can see he content and menu in different languages :)
I don't use xmod... but I read a lot about it... I simply don't have the budget to buy it... but its really amazing... Now for every module I "study" I always take a look at localization capabilities!
Xmod is also very good with that... you can see this thread at DNN Professor forum... there 3 nice links to all you need to know: http://dnnprofessor.com/DiscussionFor...
Now another way is to use different pages for each language or even different portal... honestly I do not like that approach so I wouldn't know what steps you would need to take, but its certainly more complex!
Btw, AFAIK you can not localize the "Links", for example, in my current skin I have the links token at the bottom, this remains in the main language... I can't translate it... If anyone knows how could I do that... please tell me :)