You would have already used Google Indic Transliteration or Transliteration Bots. Now Google has launched Google Indic Language Transliteration feature in Gmail compose window, which enables you to select Malayalam, Hindi, Tamil, Kannada or Telugu from the compose box menu and start type in English.
When you compose a new mail in Gmail, you should now see an icon with an Indic character. This feature is enabled by default for Gmail users in India. If you do not see this function enabled by default, you will need to go the “Settings” page and enable this option in the “Language” section.
When you click the Indian languages icon, you can type words the way they sound in English and Gmail will automatically convert the word to its Indian local language equivalent. You can select the language of your choice from the drop-down list next to the icon.
Of course there’s more, which they refrain from mentioning, but what I don’t see is support for voice and file transfer that the original desktop client supports. It also doesn’t sport the AIM integration that seems to only be found in the web versions, most notably within the Gmail chat client. 