I use a modified file default_language.php (with some German translation). Most of the terms work, but the translation does not work for example for _UE_BUTTON_LOGIN and _UE_BUTTON_LOGOUT' (additions 1.1 frontend) or _LOGIN_TITLE and _UE_REMEMBER_ME (additions 1.2 frontend). Instead of the translated terms it takes the english ones (I do not know from where...).
My installation:
CB 1.2 RC 3 (upgraded from version 1.1)
mod_cblogin 1.2 RC 3
Joomla 1.0.15
PHP 5.2.6
The "problem" is solved: I uploaded default_language.php in ../community/components/com_comprofiler/plugin/language/ instead of ../community/components/com_comprofiler/plugin/language/default_language/.