How do I use translated taxonomy terms in exposed views filters?
The answer to this is to use the i18nviews module, which is independent of the modules included in i18n. Once the module is installed then in your view chose Filter: Has taxonomy (translated terms).  Even though the selection will be in the source language they will then translate properly on the page views.

Note: at the time of this post il8nviews is in development, has little to no documentation, and is a bit difficult to work with, but hopefully that should be cleared up soon.