The Straight Dope tries to answer the question “How can the Chinese use computers, since their language contains so many characters?” and gives a very fascinating insight into the Chinese language:
(3) Enter the syllable into the computer phonetically using Roman (i.e., our) letters. This takes up to six keystrokes plus, in some programs, one more keystroke for the tone. Typically this pops up a menu of possible characters, six characters or so at a time.
(4) Page through the characters looking for the one you want. With 50,000 possible written syllables but only a few hundred possible spoken ones, each spoken syllable can have as many as 131 different meanings (average: 17), each with its own character. You could be paging quite a while, and you still might not find the character you want–no program includes all 50,000. (Answer to obvious question: in speech you figure out the meaning from the context. Never let your attention wander during a Chinese conversation.)
After reading the whole article I am amazed at how the Chinese have managed to be so computer literate!
Our own problems with Indian languages are similar, and if you have any interest in entering Indic languages into a computer, you should check out Lipikaar.com which is trying to use a similar technique.