All files under htdocs/language/english to be moved into one, mail_templates/ to be moved within SQL and with option to be edited from the administration, help/ to be removed from xoops installation and moved to wiki.xoops.org.
All files under /modules/module-name/language/english/ to be replaced by 2 new files one for administration, 2nd for site / user part.
All files to be written in INI format with encoding UTF-8 without BOM - http://unicode.org/faq/utf_bom.html#BOM
1 language file per themes/theme-name
1 language file per external 3rd party addon such as tinyMCE for changing it's configuration, currently there is tinyMCE installed, but no one knows that can change almost every option in it.
1 language file for the /installation, like Catz did it... yeah the installer is ugly, but everything is one language file.