The app lets you translate written phrases simply by pointing your iPhone's camera at them. The app's optical character recognition technology recognizes the text, which is then translated and shown on your iPhone's screen instead of the original text.
With today's technology, it's not hard to imagine an application like Word Lens, but it's quite amazing if you remember that ten years ago it was in the realm of science fiction.
The text is translated word to word, which makes the app quite limited in the sense that you won't be translating a book with it, but it's great when you need to decipher a sign or a restaurant menu in a foreign language.
The app itself is free, but you must pay for the individual language packs. Currently, only English to Spanish translation and vice versa is available, and that pack costs $4.99. You can install the app here.