From what I've understood of them (which is PHP Support Tickets and phpB😎 the language file is just something like:
$lang['welcome'] = "Welcome to the website";
$lang['something'] = "this is more text in a language";
That is re-created for each language you want (english, german, spanish, etc.). Then, in your index.php file, you include the language file as a regular file:
include('language.php');
Now, the other option (for multiple languages) is to set a cookie that has their language in it. Then based upon the cookie include a certain language file.
~Brett