assume you came to the Netherlands carrying your own laptop with English as the default language. open google.com web page and see Dutch. it is wise to use geolocation and redirect URL to a local server, it will handle requests faster. on the other hand, it is stupid to change also the language of the page ignoring user-agent string. actually the local server is available in English, why you are not redirected there?..
ok, this is not the main point, it takes only few clicks to change settings manually, see the snapshot on the right.
the pitfall: all the languages are labeled in Dutch. although it is not a problem to guess English in many European languages, can you easily do the same in Egypt with labels in Arabic?
of course in this case you can use Google.com in English link at the bottom, but it is not available on other google sites. what is offered instead?
a wikipedia-like style, when all the languages are labeled in their native transcript. for example chrome download.
it is rather wise, people can easier recognize letters of their native language. what if the translation to your language is not available? search through the long unsorted list to pick something acceptable? it can be very annoying.
another google example contains labels in the local and native languages (found on blogger). what is the point to do this? if you know the local language, you are already there. if not, there is no advantages over previous example.
the most sensible approach is used on knol, here English label is supplemented by native. it combines all the advantages, you can easily find the native language or select preferable from the sorted list.
all these examples are discovered during one day. I would not be surprised if google used even more combinations, which are not consistent.
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