Transliteration provides a central transliteration (romanization) service to other Drupal modules, and cleans file names during upload by replacing unwanted characters.
Generally spoken, it takes Unicode text and tries to represent it in US-ASCII characters (universally displayable, unaccented characters) by attempting to transliterate the pronunciation expressed by the text in some other writing system to Roman letters.
According to Unidecode, from which most of the transliteration data has been derived, "Russian and Greek seem to work passably. But it works quite bad on Japanese and Thai."
In Drupal 8 core
Transliteration functionality is now part of Drupal 8 core. See the Transliteration change notice for details.
The rest of this page describes the Drupal 7 Transliteration contributed module. Note that the Core transliteration functionality in Drupal 8 Core does not include any configuration options, update screens, or the like. Only the Third Party Integration and Language-Specific Replacements sections below are somewhat relevant, but see the change notice referenced above for details on how to use the Drupal 8 transliteration service's equivalents.