Here’s how to do it. (Note: This has been tested on Mac and Windows. On Windows, this depends on MozillaBuild 1.3; on both it depends on Python setuptools.)

1. Install compare-locales

wget http://pypi.python.org/packages/2.5/c/compare-locales/compare_locales-0.6.1-py2.5.egg#md5=0b939a22d87427d80f5286dc5eb1eab2
easy_install compare_locales-0.6.1-py2.5.egg

2. Clone mozilla-1.9.1

hg clone http://hg.mozilla.org/releases/mozilla-1.9.1

3. Create the barebones localization

mkdir -p tl/browser/installer tl/browser/profile/chrome tl/browser/searchplugins tl/browser/updater tl/toolkit
cp mozilla-1.9.1/browser/locales/en-US/defines.inc tl/browser
cp mozilla-1.9.1/browser/locales/en-US/profile/chrome/userC* tl/browser/profile/chrome
cp mozilla-1.9.1/browser/locales/en-US/firefox-l10n.js tl/browser
cp mozilla-1.9.1/browser/locales/en-US/README.txt tl/browser
cp mozilla-1.9.1/browser/locales/en-US/searchplugins/list.txt tl/browser/searchplugins
cp mozilla-1.9.1/browser/locales/en-US/updater/updater.ini tl/browser/updater/updater.ini
cp mozilla-1.9.1/toolkit/locales/en-US/defines.inc tl/toolkit

4. Create a mozconfig file, setup your object directory

cd mozilla-1.9.1
echo “mk_add_options MOZ_OBJDIR=@TOPSRCDIR@/../fx-tl” > .mozconfig
echo “ac_add_options –with-l10n-base=../” >> .mozconfig
echo “ac_add_options –disable-compile-environment” >> .mozconfig
echo “ac_add_options –enable-application=browser” >> .mozconfig
make -f client.mk configure

5. Test merge-ab-CD and langpack-ab-CD targets

cd ../fx-tl
make -C browser/locales merge-tl LOCALE_MERGEDIR=`pwd`/../merge
make -C browser/locales langpack-tl LOCALE_MERGEDIR=`pwd`/../merge LANGPACK_FILE=`pwd`/../firefox-tl.xpi

If everything went well, you should be ready to translate now!