Dictionaries
KBabel come with 3 modes for searching translated PO strings: translation database, PO compendium an auxiliary PO file.

Translation database
You can configure this searching mode by selecting Settings Configure Dictionary Translation Database in KBabel menu.

Auxiliary PO file
This searching mode is based on matching the same original string (msgid) in an auxiliary PO file, translated in other language. It's very common that romanic languages have similar words. Same for anglosaxone and slavone ones. For example, I want to translate then word "on" in Romanian from kdelibs.po, but have no clue. I look in the same file for French and found "actif". In Spanish one I found "activado". So, I conclude that the best one in Romanian will be "activ". KBabel automate this task. Currently you can define only one auxiliary file to search.
You can configure this searching mode by selecting Settings Configure Dictionary PO Auxiliary in KBabel menu. In "Configure Dictionary PO Auxiliary" dialog you can select the path to auxiliary PO file. To automate PO file switching when you change current edited file, there are many variables delimited by "@" char which are replaced by appropriate values:
@PACKAGE@ 	 The name of currently translated application or package. For example can expand to: kbabel, kdelibs, konqueror etc.
@LANG@ 	 The language code. For example can expand to: de, ro, fr etc.
@DIRn@ 	 where "n" is a positive integer. This expand to the "n"-th directory counted from filename (right to left).
In editline is displayed the actual path to auxiliary PO file. While you best use provided variables in path, it's possible to choose an absolute, real path to an existing PO file. Let's take an example. I'm Romanian and I have some knowledge about French language and I work on KDE translation. First step is to download a very fresh kde-i18n-fr.tar.bz2 from KDE FTP site or to use CVS system to put on my hard-disk a French translation tree. I do this on /home/clau/cvs-cvs.kde.org/kde-i18n/fr. My PO sources directory is in /home/clau/cvs-cvs.kde.org/kde-i18n/ro. Don't forget to select "PO Auxiliary" as default dictionary and check Automatically start search in Search tab from KBabel "Preferences" dialog.

PO compendium searching
You can configure this searching mode by selecting Settings Configure Dictionary PO Compedium in KBabel menu.