Google Labs has a “indic transliterator” which will take Latin characters such as “namaste” and turn it into नमस्ते. Here is the link:
Also, this is being used in Blogger to let you blog in Hindi:
How to enable Hindi in your OS/Browser:
Mapping of Latin to Devanagri that is used for the transliteration:
This was done by Google Labs in India. You can see their other public projects here:
Such as the Indic language on screen keyboard:
And you can discuss these and other ideas you have on the Google Labs India discussion board:
If you are not already a paid subscriber, you should consider becoming one. It is only $12 every 3 months. That's only $4/month. Learning Hindi is worth much more than $4/month, so this is a great deal.