The Microsoft Indic Language Input Tool (erstwhile Akshara) is now available for developers to use in their websites. By including a bunch of scripts, web developers would now be able to accept Indic Input for their websites. This transliteration feature helps in places where we need to capture information in the local language without having the respective keyboard.
The Indic Input tool is also available as a desktop version for use with Word, Excel and pretty much any input in Windows 7, Vista and XP.
Developers can also check here to include this feature in their own websites (available Support for Bengali, Gujarati, Kannada, Malayalam, Marathi, Oriya, Punjabi, Tamil and Telugu).
Harish Ranganathan, one of the Application platform Evangelists at Microsoft has written a detailed post on how to make your website Indic Aware in his blog. I would highly recommend you read his article!
You would also be interested in seeing this post which was written earlier – Ever wanted to type Indian language text easily into any application?