You're right, I didn't make it easy to find the translation files. User created translations are located in the following folder:
%appdata%\InstantUpdate\Languages
%appdata% is:
"C:\Documents and Settings\YourUserName\Application Data\" on Windows 2000 and XP"C:\Users\YourUserName\AppData\Roaming" on Windows Vista.
I'll make this process easier in the next version.
I'll have a blog post about this in a few days, but any new translations or translation fixes from anyone can be sent to my e-mail support@wyday.com. I'll also make all new translations available for download immediately (as well as including it with the next version).