My brain is dead, it really is. Actually setup gettext on the server...

sugar/activity/activityfactory.py

@@ -20,7 +20,6 @@ import logging
 import dbus
 import gobject
 import gtk
-import gettext
 
 from sugar.presence import PresenceService
 from sugar.activity import bundleregistry
@@ -70,9 +69,6 @@ class ActivityCreationHandler(gobject.GObject):
         registry = bundleregistry.get_registry()
         bundle = registry.get_bundle(service_name)
 
-        gettext.bindtextdomain(self._service_name, bundle.get_locale_path())
-        gettext.textdomain(self._service_name)
-
         bus = dbus.SessionBus()
         proxy_obj = bus.get_object(service_name, bundle.get_object_path(), follow_name_owner_changes=True)
         factory = dbus.Interface(proxy_obj, "com.redhat.Sugar.ActivityFactory")

sugar/activity/activityfactoryservice.py

@@ -18,6 +18,7 @@
 import os
 import sys
 from optparse import OptionParser
+import gettext
 
 import gobject
 import gtk
@@ -93,6 +94,10 @@ def run(bundle_path):
 
     logger.start(bundle.get_name())
 
+    gettext.bindtextdomain(bundle.get_service_name(),
+                           bundle.get_locale_path())
+    gettext.textdomain(bundle.get_service_name())
+
     os.environ['SUGAR_BUNDLE_PATH'] = bundle_path
     os.environ['SUGAR_BUNDLE_SERVICE_NAME'] = bundle.get_service_name()
     os.environ['SUGAR_BUNDLE_DEFAULT_TYPE'] = bundle.get_default_type()