The upgrade package from 2.0 to 2.1 works fine however when the system asks you which languages you want to make available it does not register you choices in the system.
This means that in the Language drop down, all the available languages are listed - not the ones you specifically wish to support. Furthermore there is no functionality in the admin system to select supported languages should you wish to choose different configurations at a later time... Nice to see RTL implemented in the Arabic language packs :) Would also note that Hebrew is not supported which might be a useful one.
Added: The language dropdown does not default to the selected language, this means that if you change theme it typically switches it to Arabic
The SplendidCRM Configuration Wizard should enable and disable languages based on your selection. My best guess as to why you still saw the disabled languages in the drop down is because the application caches needed to be reset. This could also explain why you are having a problem with the language drop down. What version of SplendidCRM were you upgrading from?
In the Admin area, there is a new Manage Languages link that allows you to enable/disable languages.
I'm not sure why Hebrew is not supported but Croation and Bulgarian are. The translation is provided by a service, so we can only support the languages that the service supports.
I've just done a fresh install from scratch (excluding DB) and it works exactly as expected.
Not sure why my upgrade didn't work - possibly because it was a mixture of 2.0 and 2.1 bits grabbed from the vault... The new "Manage Languages" link was exactly what I would have expected to see when I made the post - so this isn't a bug unless there is a problem with upgrade - it may not be if the 2.0 version being upgraded is vanilla.