Modern games are played through at the same time (or at least some are). Jeremy Blaustein noted that he always asked for the game to play, since it's impossible to do a very good translation without it.
FF7 suffered because
a. Baskett was not given enough time
b. They provided him no game
c. They provided him with a useless tool (makou reactor is much better than what he was using)
d. They provided him no information on the plot or on characters or anything. He was left in the dark.
He hadn't a prayer. They learned their mistake for FF8 and finally became professional by FF9. MGS on the other hand... Blaustein had contact with Hideo or the team, was given MASSIVE amounts of documentation on the plot and characters and science, and I think was also given the game to play too. He still made a mistake with the dominant / recessive gene stuff, but generally it was an absolute example of a competent localization.
Sometimes even having the best localizers on board isn't enough
http://www.hardcoregaming101.net/jb/jb2.htm#shenmue