http://forums.somethingawful.com/showthread.php?threadid=3190473
 
  "Policenauts.net’s translation project team, including Something Awful’s very own slowbeef, have been working long and hard to produce a workable patch for the game containing an English translation. The English release, started in 2002, is set to be released 8/23/2009 at 12:00PM EDT. "
 
I've been following this for awhile, and since I've always wanted to play this game (but didn't understand much Japanese) this is big news.  There is more information on the site posted.

This would be fantastic. I would love a chance to play this game. Thank you for posting!

Sounds awesome

The fan-engineered English localization of Hideo Kojima's PSOne cult classic Policenauts is finally complete. The project's page today announced that the patch is live.

For those not in the loop - that includes me, fair warning - Policenauts was a sci-fi adventure game produced for 3DO, PlayStation, and the Sega Saturn back in 1996. While an English localization of the game was promised, and work began on it, it never was released. Kojima said developers were simply unable to synchronize English dialogue with the original cut-scenes.

Now, 13 years later, it finally arrives. The project took nearly two years, much of that trying to find a programmer to insert the translation into the code. Quoting from its wiki here, the project got a kickstart last year when a Something Awful member began experiments inserting text into the game. A year later, here we are.

The patch is 7.9 megs, and available through five different sources here.

The Policenauts Translation Project [site, thanks Donald B. Zorak, Joey M., Andrew H., Inu B. and others]

 Yesss!! I've been following this project for years. Finally great to see it released!