Holy cow, I wrote a book!
There are two questions here.
The first question is "What content is in scope for localization?"
The next question is, "Of everything in scope, how much of it
actually gets translated?"
Historically, the answer has been "All of it."
Not just the stuff you might expect, like strings and dialog boxes,
but other stuff like
As you can imagine, translating every single string and dialog box
(and possibly also bitmaps and animations) is an enormous undertaking.
Windows Vista mixed this up a bit by introducing
Language Interface Packs,
which are "mostly-localized" versions of Windows.
Each Language Interface Pack starts with one of the "fully-localized"
versions, and then re-translates a subset of the resources
to suit the target language.
Strings left untranslated receive the translation from the base language.
Michael Kaplan appears to have quite a supply of
which he dips into whenever a new LIP is released.