I have to say that the built-in dictionaries in the kindle are far better than the Kobo's, and the dictionaries are non-replaceable in the Kobo. Anyway, you can highlight a word in the text, ant translate it as long as the dictionary has that word.
I suggest you a test-run:
- register at kobobooks.com
- download the desktop application:
http://www.kobobooks.com/desktop
- download a free ebook and start reading it with the desktop app - it has exactly the same dictionary than the Kobo Touch device.