Language is component - developer tool. This component may be used only for development of native components for Joomla 1.5.
It is not related to multi-language and does not provide this functionality on front-end.
This component parse php and .xml files and compile en-GB.com_component.ini file both for front-end and back-end. It also parses all your existing language translations and adds new indexes there for easy future editing.
To understand more about this component and how it works, please, read Understanding JoomSuite Language article in our JoomSuite for Developers category.