2010/10/11 Marcus Buck wiki@marcusbuck.org:
There was a Google Summer of Code project: http://www.mediawiki.org/wiki/User:Peter17/Reasonably_efficient_interwiki_transclusion. It's basically ready to use. About the _actual_ implementation you have to ask the Foundation developers.
Marcus, I would hardly call that project "ready to use". It leaves many issues unresolved, such as: 1. local editing of the remote data with unified/non-unified accounts 2. automatic translation importing from translatewiki (people would probably want to use localized parameters/template names) 3. all the known limitations noted there :)
It looks like a good start, but I somewhat doubt we will be seeing it in production soon.