LIP means Language Interface Pack. There is a difference between the Multilingual User-Interface (MUI) and the LIP. In case of MUI all the strings are localized into the language. Whereas in case of LIP, only 20% of the UI (menu commands) elements which are used 80% of the time are translated. There is no MUI available for any Indian language. Instead LIPs are available for some languages. Once the LIP is installed, the UI will be in that language only. If you want English UI, then you will have to uninstall the LIP. It is not possible to toggle the UI language without re-booting as is the case in Office 2003 LIP.
Currently available Indic LIPs for Windows XP-
Kannada
Hindi
Tamil
Malayalam
Bengali
Gujarati
Marathi
Konkani
Punjabi
Telugu
LIPs for these languages are yet to be released -Sanskrit and Oriya.