I thought I would reply to this post with my question rather than a new one as this post is still relevant.
I have a customer who will have one site promoting villas in spain. He will want them in two languages. English and Spanish.
When I got to thinking about this I thought, "what high ranking site out there has done this before and how do they do it?" So I looked at
www.microsoft.com and found that they have language sites like this:
http://www.microsoft.com/germany/default.aspx
In other words they just seperate the languages/countries by using a subfolder. No subdomains, no new domains nothing.
I guess as MS have done it and each subsequent page seems to work it would be ok to do it with my customer?
Still thinking about and researching this on btw