I was talking with a student about his chatting habits the other day. He's from Gujarat, India, and mentioned working for a media company that translated a newspaper into many of the Indian languages. He was, therefore, familiar with them all, and was able to tell me: yes, Indian young people use English language letters, but communicate in their own language (in his case, Gujarati). They could probably read each other's notes to each other as much of the language shares common spellings etc., but, the older generation, being less fluent in English in general, would probably not understand. This kind of language is a product of several circumstances: 1) many Indian students are abroad; 2) many have internet access and time to talk to each other and to friends back home; 3) though some may be able to get Hindi script on their computers, many don't, so it's easier to use English letters; 4) the more computer literate they are, the more likely they are to be able to read the English letters anyway.

It's not really a new language that is born with their chatting; at least not until they spend enough time doing this to change what we now know as Gujarati. But I would like to know if that has happened, and, if so, when, and/or with what languages.