I think the "Skill Rating" section needs a section on language that would clear this up. Here's my crack at one, with some explanations:
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No Rating: Unaware. The character would have to be positively autistic, or raised by wolves. A lack of even basic body langauge or "world-wide" cultural references ("Combat Mage: TNG, now in 150 languages!")
0: Untrained. Has never had a class on the language, but has probably overheard it at least a few times. Knows a few common phrases and words, especially those that have made it into popular advertising memes ("Yo quiero StufferBell!")
1: Beginner. Is able to use the language at an extremely basic functional level. This includes all the things you are typically taught as a first-year language student -- how to ask where the restroom is, or how to ask for directions to a given destination or order from a menu. In 2070's, may also include such helpful situations as "Put your hands where I can see them" and "Transmit your SIN or we'll fire on your vehicle"
2: Novice. Is able to use the language in everyday situations, though haltingly. Common conversational topics, such as the traffic, the weather, etc., are generally able to be understood both speaking and listening. Conversations about more isoteric subjects are more difficult or even impossible. No one is going to mistake the novice as a native speaker, but his meaning is likely to be understood.
3: Professional. Is able to use the language regularly in the line of work. A wage slave with a language skill of 3 would not have difficulty interacting with his co-workers within the context of his job. Other than a few humorous misunderstandings, the language barrier doesn't interfere with the ability to get a task completed at this level. For more poetic expression, or for topics outside a character's day to day activities, conversations will be halting at best. This level includes some understanding of some colloquialisms. A character with a "Professional" level in a language could potentially hire themselves out as a low-paid translator, though the occasional mis-communication might result.
4: Veteran. Is able to use the language fluidly and in a wide array of topics. A veteran is often mistaken for a native speaker. A veteran may run into difficulties translating very old or obscure works, or understanding slang and colloquialisms significantly different than the area in which the character studied. At this level of language skill, the character has sufficient vocabulary and understanding of language structure to (if they are so inclined) form reasonable poetry. A "Veteran" level of language allows a character to act as a skilled translator; translating most topics without difficulty.
5: Expert. Is able to speak fluidly on even unfamiliar subjects, and understand dialects and obscure cultural references. Can often relate the derivation and history of words and sayings, and can translate old and obscure works without difficulty. An "Expert" language speaker can hire out as a translator to important positions, such as CEO's visiting their extra-territorial holdings. Experts are seldom identified as non-native speakers.
6: Elite Is a skilled wordsmith in the given language, perhaps even a speech writer or novelist. Can recite quotes from many authors who wrote in this language, and discuss obscure language-related topics. An "Elite" level of language puts the character far above the usual "native speaker" in knowledge of their language. Such a character may be a skilled ambassador to a foreign power.
7: Legendary Able to translate
A Void without use of a thesaurus, and in doing so keep with the original 'no letter e' quirk.
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That's my take on the skill ratings for language skills. How does this translate as "when to make a test?" What I would do is assume that under "normal" circumstances, a character can take the listed action without making a test. For example:
Skill Rating 1: The character can get directions to a given building, though he may have to ask multiple people before he can be clearly understood. He'll usually get where he is going.
Skill Rating 2: The character may have to calm the occasional horrified reaction and explain that he meant "shoe" and not "mother," but will usually be able to smooth over any mistakes and eventually be understood in a general conversation. Communication about many topics is possible at this level, but it takes time and patience.
Skill Rating 3: The character may have to ask what is meant by a certain metaphor, and won't be able to list very many synonyms for a word. But eventually he will be able to understand most conversation, though it will often involve some questions. Generally conversation proceeds at a fairly normal pace.
Under stressful situations, I would call for a test for these same actions. For example, trying to get a witness to tell you which way the man who just robbed you went, before that robber gets away (rating 1). Or explaining to Sioux border patrol just what you are doing with an assault rifle near the border (assuming you have a legitimate reason, otherwise it falls under "con") (rating 2 or 3, depending on how complicated the reason is)
Even under stressful situations, I wouldn't call for a test for something covered by the next skill level down. Thus, a character with a professional rating in a skill (rating 3), i.e. someone who uses it daily, would still be able to stutter out "barghast... behind you!" in the appropriate tongue without a test (at least assuming the character would reasonably have some vocabulary including barghast.) Or an "Expert" (rating 5) could converse normally and clearly (though the barest hint of accent might be audible) but would have to test to read the ancient manuscript while the corp sec team has him pinned down with cover fire.
Additionally, I'd call for a test to speak at above that level. For instance, a character with rating 1 may be able to carry on a halting conversation, or even a reasonably fluid conversation if they are extremely lucky and the conversation does not drift from their limited vocabulary and understanding of sentence structure.
Language is tied to Intuition, so a high intuition character has a 'knack' for understanding languages. If you just have characters make rolls for language any time a language is used, there is no difference between a character with 6 intuition and a very basic understanding of the language (skill 1), and a character with poor intuition (rating 1) and 8 years of university study in a language (skill 6). Using the above as guidelines, however, makes a good balance between the two: A high-intuition character with a low skill is more likely to be understood, or even speak "above his level of understanding" (being quick witted allows him to cover his mistakes well), but still not have the massive vocabulary and understanding as a doctorate in that language would have. Thus, while he throws the same number of dice as a high-skill low-intuition character, he has higher thresholds, and has to make tests for tasks the high-skill character would find "routine."
Edit: Lingos I'd treat speaking to someone with a lingo that you don't have yourself as a one or two point reduction in skill, depending on the lingo and the situation.
For example, a "Professional" level (rating 3), who can normally converse with his fellow wage slaves without a test, may only be able to understand the BTL'd ganger well enough to get directions (assuming the ganger is friendly, otherwise it will require a test), or may only get enough out of the complicated tactical instructions from the army grunt to know to follow him. "I have no idea what means 'humping the FLIR 2 clicks downriv', but I will follow."
Edit #2 (at least): Additional dice from AR The table for rolling language skills lists a "+1 to +4" modifier for using AR visual display help." I'd treat this as extra dice, but
not as affecting the skill. Thus, while a person with low skill may be able to quickly look up words he needs, his understanding of language structure and the like isn't affected. So he's more likely to succeed at his task, but he still must roll according to his original skill. Being able to look up words and some grammar won't help you speak fluidly and quickly. But being able to look up "big bronze statue" might help you succeed at getting directions when you would otherwise fail.
Actual Linguasofts (as opposed to a much cheaper AR "language dictionary") are of course treated exactly like the appropriate skill.