I've spoken to a friend of mine who is willing to work on porting Tesseract over to pure C# in exchange for peanuts, we'll then split the proceeds from any ensuing WP7 and desktop applications.

A translation app is still useful for desktop Windows, especially laptops as they all have webcams nowadays (and the upcoming W8 tablets); but we have thought up other innovative uses for live OCR on WP7. We'll keep you guys informed.