I used to know a couple of people working on rules-based translation, but that approach seems to have been sidelined by the early successes of statistical methods. I hope that work has continued in the background, not only for its own sake, but because statistical methods may have reached a point of diminishing returns.

The lack of understanding in statistical machine translation is a counter-argument I use whenever someone claims that its apparent success is a sign that the AI singularity is imminent, but I have to admit that the recent progress in statistical AI has led me to wonder if, just maybe, these methods are closing in on the fundamental methods of understanding. Perhaps John von Neumann's famous quip "Young man, in mathematics you don't understand things. You just get used to them" is actually generally true.