Translate a plugin using .po .mo files

There are others, but this is most used: Poedit, a cross-platform gettext catalogs (.po files) editor.

.mo stands for Machine Object
— compiled export of the .po file which is used by WordPress
.po stands for Portable Object
— editable text file with the translations strings
— based on the master .pot file, using Update from POT file PoEdit function
— some folks distribute this as a master file, but it should be used only for translations
.pot stands for Portable Object Template
— editable text file used to grab all the translatable strings from WordPress itself and Themes and Plugins, using Update from Sources PoEdit function

Duplicate the .pot file and rename it to plugin-basename-lang_COUNTRY.po
Example for the referenced plugin case: subscribe-reloaded-pt_BR.po
— pt_BR means Portuguese Brazil, but many languages don’t have a country variation…
— you’ll have to fill in with your own language
WPLANG in wp-config.php file must be set to your language, e.g., pt_BR
Every time you save the .po file, PoEdit automatically generates a .mo file, which is the one WordPress uses and basically the only one you need to upload

If you do a full or a decent partial translation, submit it to the plugin author so he can include it in the Repository and you get credited for it
Don’t forget to make a backup of your translation, because if you upgrade the plugin your file will be lost
@user17078 plugin suggestion is quite nice, but I never used it much