Hi Ranjit,
I hope to answer your question. Be sure to reply if I am incorrect in my understanding.
The tab approach is only for those who tend to have exact 1 to 1 sites. It can be very cumbersome to work with long run, and there are other implications as well.
The second option you mentioned is the tree option. To get this to work, you can go in a multitude of ways. The primary method is to use separate domains for each language, which we all know is not always available. The second method is to use sub-directory style approach, which basically puts your home page into language sub-folders. (Example, TeeJet.com)
Sticking with the Second Option with method two, you have to do some manipulation in umbraco, which is already present. Simply assign the main domain (www.domain.com) to the root node (a simple doc type - assign any language), create a language folder doc type for holding the languages (this can be used later to define images, language text, etc). Create your site below this folder. You will need to assign a domain to each language folder (www.domain.com/language) with the corresponding language.
On the root node, you will have to do some redirection to point the user to the correct language/homepage. This can be done with a simple user control that uses the browser's language settings and redirects (should do 301 redirects) to the correct language, or you can do a selector page where the user would select the language manually.
Build in XSLT script templates will have to be modified to reference the site information from level 3, rather than level 2 in most cases, but, these are simple changes.
If you have questions, feel free to ask.
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