Some time ago, http://meta.wikimedia.org/wiki/A_new_look_at_the_interwiki_link was proposed, which aimed to ease the hanfling of interlanguage links. However, it didn't progress very far, as no technical solution existed for central interlanguage link handling it envisioned.
I have now created a MediaWiki extension http://www.mediawiki.org/wiki/Extension:Interlanguage which gives the technical solution and renewed the proposal at http://meta.wikimedia.org/wiki/A_newer_look_at_the_interwiki_link . Comments, suggestions, critiques are welcome.
You may see the extension at work at http://testwiki.smolenski.rs .