In a nutshell
i'm a newbie. Having ordered my kindle 3 just a few hours ago i've spent the time trying to understand the thread.I'm posting my thoughts. Please correct me if i'm wrong.
1)based on the language metadata of the prc file kindle uses the appropriate dictionary. So for german ebook it will lookup a dictionary whose language metadata indicates its german provided theres only one german dictionary in kindle.
2)The language metadata of the books and the dictionary both can be changed via mobi2mobi either using the command line or the gui version. The same effect can be achived by the tool mobipatch.
Please let me know.