multilingual taxonomy doesnt make sense

Dupal: 7.8
i18n: 7.x-1.0

There are 3 requirements that I usually encounter when building a multilingual website that relies heavily on taxonomies.
R1-Be able to list taxonomy terms (they should only list the appropriate language terms)
R2-The term pages should show the appropriate language nodes
R3-Tagging must make sense. When creating a node the user should be able to only select the appropriate language terms.

There are two ways that I set up taxonomies (as a test).
Version 1 - Per language taxonomy terms (each term has a language and terms can be related/translated)
Version 2 - One term with string translation

The site i set up has two languages French and English. The English is set as default.

Heres how things turn out:

Version 1
R1 - Shows all terms (french and english on both sides) I realize I'm using views here so its probably not an i18n issue. But it would be nice if Drupal set up a page for a Vocabulary that would list the terms in the vocabulary. (Also in D6 you can't filter by taxonomy language.. Can't find a way in D7 to do this either)
R2 - Shows everything not respecting language. There's nothing restricting you from tagging english content with french taxonomy terms. But the main difference between D6 and D7 functionality is that in D6 if you browsed to a french term page it would only show french nodes. (but you could see the english nodes tagged with the french terms by browsing to the french term through the english side of the site) while in D7 if you browse to a term page it shows both french and english nodes not respecting the current language on the site.
R3 - If you use checkboxes or a select list (widget) then you will see all french and english terms regardless of what language the node is and what language the node create form is in. But if you use the autocomplete widget it will only find the appropriate language term (based on current site language, not node language). I would like the select list and checkboxes to work the same way.

Version 2
R1 - Using views to list the taxonomy terms results in the english term being displayed despite current site language. (this is an views issue not i18n.. basically views is not putting the taxonomy names through the t function)
R2 - Shows all language nodes regardless of current site language.
R3 - It works! Entering content from the english side shows english term names. Entering content from the french side shows the french translations!

Comments:
It would be awesome if drupal handled R2 and R3 out of the box. Drupal 6 would satisfy R2 (browsing to term page shows only appropriate language). It would be amazing if version 1 (per language taxonomy terms) would only allow you to tag english terms to english content. This might be quite complex to satisfy though. Theres an option in D7 that forces you to enter french content from the french interface. If that is enabled and R3 works (only showing appropriate language terms when tagging a node) Then my data would be sane!. Also I think that a french taxonomy term (per language term) should only be browsable from the french side. Browsing from the english side should result in a 404. This would help with integrating taxonomy pages with menus. Currently if you put a taxonomy page into a menu, the menu item will display in french and english. To clarify the menu will display the english name on the english side and the english name on the french side (they link to the same term in french and english) If browsing to the taxonomy term in the wrong language would result in a 404 then the menu would only display the term in the appropriate language.

Am i missing something (a module) or am I doing something completely wrong here?
I can get all three requirements to work but only if i put in some php into views and do some tpl.php work and some form hooks.

Tasks I'd suggest:
1)make the taxonomy pages only list the appropriate language nodes (for example if we are viewing the taxonomy page from /en/ it should only show english nodes). This works in D6.
2)If a taxonomy is set to english you should not be able to browse to it from the french side. (This would make working with taxoomy term pages + menu much easier) But it might be a bit problematic because you can tag english content with french taxonomy terms.
3)If a term has a language you should only be allowed to tag that language nodes with it.