How to add a new user permission "Translate own nodes" ?
The basic method followed by that module should work (custom access callback + hook_menu_alter), but the code would need updating for D7. 

From a quick scan of the code (so there may be other things that need updating) hook_perm is now hook_permission and hook_nodeapi has been replaced by serveral hooks (in this case only the 'prepare' op is used, so hook_node_prepare is the only one required here).