If your computer supports UNICODE, it can.
What is Unicode?
Unicode is an industry standard of characters, or, more correctly, character encodings.
It is like saying 1202240 means the character 'k' in small case. Computers understand only 1's and 0's so we keep numeric codes which are then easily converted to a big string of 1's and 0's. The equivalent for 1202240 in 1's and 0's would be a long code.. I will allow myself not take that trouble of converting it.
ASCII, EBCDIC, and many others you would have learnt or come across when you read computer books are all number codes(encodings) for language or symbols. So there are many different standard encodings, some companies even use organization specific encodings to keep information just understandable by their computers, some users also do something similar by inventing their own encodings and interpreting it.
I remember playing a spy-game with friends when I was a kid. We used to have charts of symbols we all put up together for each character in the English alphabet.. and for any text in English we translated it into our new written language. Hardly 26 characters but it could cover any English text and so it was fun though we took at least 3 minutes to read a word back into English.
The thing is Unicode has the largest set of characters, 100,000 of them, and when this is a standard for computers it means most language characters can be processed by a computer directly without internally being translated to something that the computer understands.
Fonts are different..
Not to confuse with unicode, remember that fonts are different, fonts are for displaying some text or symbol on screen.. not useful for anything other than displaying.
Fonts will be necessary and separately installed or used in computers to display or draw the unicode character or any character at all. So when we talk unicode, we are talking about text that is processed by a computer rather than text displayed on the screen.
For example, Windows latest Operating systems are UNICODE based for understanding characters and text, and they all ship with a font called Latha. So, in case I type a word in the Tamil language, I can setup windows such that it understands my keystrokes in unicode rather than what the keyboard sends (ASCII usually), and display the characters on screen using the Tamil font Latha.
How can I set it up? Not yet.. but we will discuss that.
Why Unicode?
Being an Indian, I can imagine how it is essential to know at least a couple of languages to be able to converse with different people rather than making mute actions with hands. We have many languages in India, forget the numbers, we have Assamese, Bengali, Hindi, Tamil, Telugu, Malayalam, Kannada, ... and so on.
Does Unicode have character sets to cover all of them. No. Possibly the 'Unicode consortium' a non-profit organization handling the standard took only languages which where known to be used by a population greater than a threshold that they had in mind. While Tamil, Telugu, Kannada, Malayalam, etc., are there, Assamese isn't included...and so are a few other languages I suppose. Likewise, I am not sure whether if they have included Tamil they have all characters in Tamil or just the most most commonly used ones or ones that classify as modern Tamil.
How they classify or why they have this but not that, and whether they have all characters or not, etc., are questions we will have when we start using software based on Unicode.
Like I mentioned earlier, it helps a lot to know more than one or two languages.. and so Unicode becoming a standard and getting widespread application into all computer technologies means we can use software in any language comfortable rather than making Computers that can only understand English...which is the big problem we already have.
If you are a programmer this question must have occurred to you "Why am I always typing software programs or code in english like 'for', 'if', 'then', etc., why not in Thai or chinese?". Because internally, ASCII based computers understand only English, since only English is part of ASCII encoding.. also program compilers have to understand unicode based instructions.
The effects of this is like,
> give up your language for English because you use technology in your business,
>give up more processing power of your brain reading, writing, typing in english..while your elders trained your brain in your baby years with your mother tongue most possibly.
>And, if you want to control technology, you want to communicate with the computer in the language or character set it understands.
Evolution and Transformation of systems to support Unicode
Unicode didn't happen from nowhere. People understood well before Unicode that a universal standard with more characters was neccessary than the 255 supported by Computers because ASCII code was the standard.
So came in a lot of U for universal standards. UCS-2, UTF-8, UTF-16, windows-2525,.. or many things like that are all character encodings which are all now superseded by unicode. You can look at it like stepping stones towards UNICODE.
Many technologies started adopting UNICODE. Operating Systems of today are all mostly UNICODE based. Like Windows NT and above use UNICODE for all internal processing. Doesn't mean ASCII is not understood.. UNICODE is carefully derived from earlier systems such that all major previous standards also are part of UNICODE and there isn't a translation requirement at all most often.
It is not just the operating system that needs to become UNICODE based or Unicode compliant.. its an entire group of software technologies, protocols and standards that have to change into this. And we are not there yet...that is why programmers still type code in english, though anybody might be using Windows XP which is very much Unicode based.
All Email software, servers and clients, have to deal with encoding/decoding text in unicode for transmission and reception.
All web-based software, or web browsers should start understanding unicode, and servers should send unicode encoded content to the browsers. This transition has almost happened. If a webpage has unicode characters browsers search for appropriate fonts and display the character. This is why sometimes you might see the actual language text on some pages, while on some other language pages you might not see because the appropriate font was not mapped or unicode support itself is not there.
Here's a live sample of tamil font
à®®à¯à®²à¯à®²à¯ˆ மலரà¯à®•à¯à®•௠ஆநà¯à®•ிலதில௠ஜாஸà¯à®®à¯€à®¨ எணà¯à®±à¯ பெர
(if you see only boxes your browser doesn't support unicode or it is not windows NT or above, or the Latha font is not there)..
(if you can read Tamil and find mistakes in above sentence forgive me i have just typed what i immediately understood with the keys... and you might like to read an entire Tamil blog here)
All programming language compilers should be able to understand unicode based instructions and be able to convert them into machine code.
Until now, I don't think there is any, not one, computer programming language compiler that can understand unicode.. they all understand only ASCII, and they may not for ever because, keyboards need to be small and can handle only ASCII english.
Yes, like you know we do have bilingual keyboards popularly used in Japan, china, etc., So, conversion to unicode also involves hardware industry and technologies. So, the conversion is taking time.
If that much didn't cover your apetite to know about unicode, below links might help you.
http://en.wikipedia.org/wiki/Unicode
http://en.wikipedia.org/wiki/Unicode_Consortium
http://unicode.org/
India and UNICODE
I was surprised, but proud to see an indian flag, and even a tamilnadu state government logo on the Unicode official website unicode.org. The site listed the indian government and tamilnadu state government as members of the consortium.
I was surprised because I am one of those critics on, India and its growth alongwith politics and development within the country, so I didn't expect to see the indian government understand importance of unicode or be a member of the consortium. I was proud for obvious reasons you will know.. I am an Indian.. and I didn't see flags of other countries or logos of governments.
And, regarding Tamilnadu, a state in India (where I live), happens to be one of the few states (outside the english speaking club) where there's a "government standard" for the regional Tamil language fonts and related tamil software standards.
Aksharmala
unicode.org had a link in the 'Useful Resources' link... to this software called Aksharmala.
http://www.aksharamala.com/
I downloaded (freeware) Aksharmala, which it seems can convert your keystrokes to an indian language font on the application you are typing the text on...provided the application is built with unicode support. For example, notepad.exe doesn't understand unicode (even if you use aksharmala), while outlook or thunderbird do.
How to type in Tamil:
To type emails in Tamil language, I install aksharmala, set the Tamil keymap, and set Latha (shipped with windows) as the tamil font it should translate my keystrokes to. I then open Microsoft Outlook or Thunderbird, press Ctrl+Alt+T (Hotkey) to enable aksharmala, and go ahead type away tamil into my email.

Few things here:
1. The above can be done even without aksharmala in a unicode supported windows. Windows NT or above. Windows itself can do this conversion mechanism if you do the proper settings in the 'Regional / Language settings' under 'Control Panel' (details below). But, yes not as easy as enabling/disabling conversion with a hotkey i think.
2. If I use aksharmala, I can use the font conversion feature even in Windows 98 which is not unicode based. But then, the font 'Latha' won't be there on Windows98 and so I will have to find, download and install some tamil font and tell aksharmala to use that.
Similar software like Aksharmala should be very much available for non-indian languages also. or, at least it will be very easy to configure support for a regional language if the operating system understands unicode.
'Regional / Language settings' under 'Control Panel' in Windows
You can find information on how to make your keystrokes mean languages other than english, on windows NT or above version computers, here: http://www.geocities.com/csd_one/keyboard/KBD_inst.htm
Note: To do settings mentioned in above link, you might need Windows installation CD if multilingual support was not enabled during installation (appropriate language fonts might not have been copied).
3. The recipient of my email should read it in Thunderbird or outlook or a browser that can understand unicode, and appropriately display correct language fonts.. otherwise the recipient would just see boxes in place of text.
Unicode Resources:
The website unicode.org has many links to useful resources here.
Typing in Tamil, Hindi or other indian languages.. is easy through below links.
All you do is type the equivalent of the language word in english.. and the applications below translate that into the language text in unicode. You can then copy the language text and paste in your web blog or email or any unicode supported software (like in any latest browsers).
www.quillpad.com
http://www.google.com/transliterate/indic