I was so looking forward to using the Kindle for reading a book in a different language and easily being able to highlight a word I didn't know and have it translate it.
Unfortunately the process of doing that on the Kindle is so arduous that it is unusable.
Yep. And the dictionaries are terrible (at least the Japanese ones). I still use the Kindle for reading, but it's not nearly as nice as I'd like. Strangely the English -> Japanese setup is much nicer. My wife uses it all the time and is thrilled with it. I use a dead tree version of a kid's Japanese to Japanese dictionary most of the time, but it's slow. I haven't been able to find anything similar that will work on the Kindle so far. I highly recommend transitioning to a native children's dictionary as soon as you can manage it (maybe with a translation dictionary as backup).
Unfortunately the process of doing that on the Kindle is so arduous that it is unusable.