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vlingo is free and does a great job of translating. It even has a "safe reader" widget which will read your text messages to you in the even you are driving or to lazy to read the text lol. I think this solves both your problems, check it out!
What is wrong with using third party apps? Some of them stomp the stock apps into the ground. You can text with Google voice actions, but it won't read text back to you. Vlingo is great too.