This template needs to be included in all translations of one page. Let's assume we have page called "Foo". The translations are called Foo (de), Foo (fr), etc.
In all translations you _must_ insert the following line:
This will create a correctly linked bar that allows to switch between all translations of a site. If you want to add a new translation language, add it here and it will appear on all sites. Untranslated versions will appear red as usual.