The only outstanding issue now is when you change the language, CRM is able to update all the menus and fields that it ships with, but is unable to translate your custom fields.
This post will show you step by step how to add custom translations for your custom fields.
For this example consider the image below; this is a CRM 2011 Online instance with a default language of English that has Spanish enabled and turned on for the current user. We see all fields and labels are translated automatically, except Skills and Years of Experience, both custom fields we added.
First create a new solution with just the entities in it that you want to translate. In the toolbar, Export Translations.
Save them to disk and unzip, open the CrmTranslations.XML file with Excel.
You will find 3 tabs, Information, Display Strings and Localized Labels. The Information tab is just that, informational, Display Strings and Localized Labels are the 2 we are interested in.
Then are both in the same format, a row for each item in the system, and a column for each language you have enabled in the system. The first language column will be the default for your system. In this example its 1033 (English)
By searching (Ctrl+F) for "Skills" you find the custom field, and see there is no entry for 3082 (Spanish).
You can now type in the Spanish translated version for each label you want to change. For this example we will just change Skills. (I don't speak Spanish, so this translation is from Google translate)
Save the XML file, and rezip both files up again for re-import just like your importing a solution.
Back in CRM, navigate back to Settings > Solutions and click the check box by the solution you created earlier > Import Translations > the dialog opens > Browse locate the zip with your updated XML file inside and Import.
Finally publish all.
Now when you return to the same contact record, you will find your custom field (Skills in English) has also been translated into Spanish.
That's it, now you can give your users a fully localized version of CRM 2011.