Karen of Google made a post on the release of this service on the official google blog. Following is what she has to say on the release:

The global nature of our mission is reflected in the phrases the “world’s information” and “universally accessible.” To this end, you may have recently read about our 40-language initiative and the story of a community coming together to develop Google search in the Maori language.

The service is powered by Google’s Transliteration, which converts tamil words typed in English into Tamil script. Fo example, using transliteration, you could type “vanakkam” and google’s transliteration engine would convert it to Tamil script as ???????.

Also, Google News is now available in tamil.

More information and for complete story please visit the official blog.