Back on topic, assuming the TC hasn't fled in terror yet. ^_^;
You know the saying, "ask a stupid question, get a stupid answer?" Well, your question's not stupid, it's just that the answer you're looking for is far more complicated than you're probably expecting. Let's not mince words: you were hoping the answer would be "there is a special program we use that can convert a Japanese disk image into a fully-functional English version", or some similarly effort-free scenario. No such luck, I'm afraid. Translation hacking takes knowledge and effort. Easy workarounds are few and far between.
The bottom line is, if you had to ask how it's done, you probably wouldn't understand the answer. But if that doesn't deter you (and good for you if it doesn't!), then I recommend you start small. Pick a Game Boy game and try your hand at translating it.