The phrase is understood by many to mean "translators, traitors" (I like my punctuation better, makes it read more like the vocal curse I believe it was). In The Craft of Translation, the author puts it this way: ""Traduttore e traditore. The translator betrays."
I wrote about this first in the context of the nifty new features in Office 2007, but all product group UA folks struggle with this. The Microsoft Language Excellence team blog (yeah, we take it that seriously) post Windows Live terminology - what users told us has interesting insights. Check out the struggles over "smart phone", "emoticon" and "IM".