According to Panos:
Monolingo relies on the fact that machine translation is pretty good at this point, but not perfect. So MonoLingo starts by by translating each word using a dictionary, giving multiple interpretations for each word. The human then (who is a native speaker of the target language) selects the translation for each word and forms the sentence that makes most sense.
I’m curious to hear more: as of this writing, the site is password-protected with no further information.