The main advantage to an internet dictionary are extra features,such as on Rikai; an always up to date dictionary database; something that is platform independent; and is available where-ever you have a computer with Japanese support connected to the Internet.
It is possible to get on line translations but invariably they are very strange and are only useful to give you a general understanding and feel for a passage. They don’t really help you learn anything. For that you must do some work.
I don’t know how they achieve it (some clever perl scripts I think) but this site allows you to access other sites in Japanese through it. When you access a site through Rikai you get little pop-ups giving you translations of the words and kanji. It doesn’t give a natural translation but it is a huge help in trying to understand Japanese web-sites.
I save the pages it generates so I can read them off-line. It is much easier to run Japanese computer based text through Rikai than to look up each word individually so I use it to make reading email easier.
Denshi Jisho is a well designed site that allows you to search a dictionary online. What more can I say?
This is a fairly well designed Flash site. Again it uses the EDICT data to provide a dictionary. The sites extra feature is the ability to save lists of words that can be later be acessed like flashcards. This feature however costs $9 per 3 months. My only big problem with this site is it’s choice of colours. Light blue text on a yellow background is very hard to read.
There is also a companion site that probably gives a flavour of what you might get for your $9
Kiki’s Kanji Dictionary
Kiki’s Kanji Dictionary is an interesting site and gives you lots of compounds for kanji and is good to browse. However I don’t really like it’s interface. It’s not easy to search.
Photo Guide Japan has a detailed list of photography related words. Very useful if you are into photography.
This is an entomological dictionary of Chinese characters as used in Japan. Very useful for finding ways to remember the characters by understanding how their meanings were derived and how the elements work.
The Counting Dictionary
An interesting little page that lists the various counters used for different items. For instance did you know potted plants are counted