Invented by Foaly, the Translator is a "crescent-shaped nodule" that sits about the wearer's ear. It allows the wearer to understand Gnommish -- and, presumably, any other language being spoken, though that has not been proven. The device appears to have been created solely for use by non-fairies, as the People have a natural ability to understand any language being spoken to them and therefore have no need of a Translator.
The first and only time the Translator is seen being used is by Artemis Fowl in The Arctic Incident so that he can understand Gnommish, as apparently speaking Mud Man gives Julius Root a headache. The Translator hasn't been mentioned since The Arctic Incident, likely in part due to the fact that there has been no cause for anyone to need to understand or speak Gnommish, and also because Artemis has since become fluent in Gnommish; by The Lost Colony, he is able to flawlessly communicate with and understand the demons after landing in Hybras. He does, however, have a slight accent.