What languages can I use, and does the simulator understand mine?

The interface, questions and lections come in 10 languages: English, German, Spanish, French, Italian, Dutch, Polish, Ukrainian, Japanese and Turkish. Pick yours under Settings → Language.
In the simulator, ATC talks like real ATC at that airport: in English (ICAO) or the airport's local language. If you call in one of those two, ATC answers in it. To practise in another language, pick an airport in a country that speaks it. Calls in any other language get an English reply.
Listening has its own language picker on its page.
Radio phraseology follows international ICAO standards.