On availability: This has currently been rolled out to all English and Spanish speaking markets. Other language markets will follow shortly. You get the instant answer if your to: or from: language is English. In the English market, if the query is foreign, the translator assumes that you want it to be translated to English.
On when it shows up: The Bing Instant Answer will return an instant translation only for common words and phrases in common languages, using a fast lookup table. This table is updated with the most frequent queries.
If a translation is not found in the fast lookup, the Answer will produce a link to the translator site, so the user can click through to get the actual translation.
On size limits: The size limit of the query is the same for any Bing query, which I believe is around 1024 chars. The size limit on the translator site text box is 15K chars.
On language auto detect: The auto detection logic is better for longer sentences, and we continue to fine tune it to work better on shorter ones.
Feel free to post any feedback you have to the official blog post here.