The answer is yes, it can be used for that. Yes, they need to have InCopy. You do not need InCopy and you most certainly don't need InDesign Server.
For a less expensive option check out StoryTweaker from Rorohokio:
Thanks Bob - that looks like it's just what I'm looking for! I'll try it out with some colleagues next week!
I've another problem as a translator in that the files i receive for translation are badly segmented. Speaking to my client they do not seem to understand what could be changed on their side to help with the segmentation. As bad as it is to have poor segmentation, so that sentences are broken up over 3 or 4 different translation units, when the client changes the formatting on their side, the previous translation units are lost as the application segments them in a different way.
Has anyone else come across this, and if so can they suggest something to resolve this?
Hi Bob. I actually saw you at the CS6 announcemnt in NYC. Great stuff. Do you have any intel on other translation plug-ins or add-ons for DPS? Any counsel would be appreciated.
Using InCopy for translating documents is an option, especially now that InCopy price is lower than years ago (its price was cut last year I believe: https://indesignsecrets.com/adobe-reduces-incopy-cc-subscription-fee.php).
That said, InCopy was meant to be used by copywriters rather than translators, and so it lacks basic tools that pretty much all translation software have (eg. translation memories, pre-translation using past TMs, etc).
You should probably try a translation tool that supports InDesign files out of the box (Redokun is specific for InDesign, but there are quite a few of them around that work with IDML) and see what the results are.
As for the segmentation problem mentioned in one of the comments above, the only thing to keep in mind is that the designers should know how (or be instructed) to use soft and hard returns appropriately. Translation tools treat soft-returns as part of the same sentence and don't segment by it, whereas hard-returns are considered as limiters of the paragraphs (and therefore produce a new segment every time).