<p>I have been looking at a few options for enabling localization and internationalization of a dynamic php application. There appears to be a variety of tools available such as gettext and Yahoo's R3 and I am interested in hearing from both developers and translators about which tools are good to use and what functionality is important in easing the task of implementation and translation.</p>

We've been tinkering with
Zend_Translate
, since we use the Zend Framework anyway. It's very well documented and so far extremly solid.
In the past, I've pretty much used my own
home-grown
solution mostly. Which involves language files with constants or variables which hold all text parts and are just echo'ed in the view/template later on.
As for gettext, in the past I've heard references about PHP's gettext implementation being faulty, but I can't really back that up nor do I have any references right now.