[Celuien]

A great topic.

Drat, I've been beaten to the point about telling/retelling being the mechanism whereby history is passed down (that's what happens when I leave to do my housecleaning ), but it's been put in far better words than I could find.

One of the other ways that the conceit works is to allow the interjection of explanations into the text. The translator can tell us that Elves and Hobbits referred to the sun as "She" or direct us to information about Hobbit calendars when Frodo sings his song in the Prancing Pony. By appearing in the text, the translator merges with the narrator, which as davem has pointed out, makes Tolkien one of the characters/retellers of the history. This also gives "permission" for the explanations to appear in a more extensive manner than footnotes. For example, the explanatory role of the narrator appears in the beginning of The Hobbit when an illustration of what hobbits are (or were) appears. It can't come from the memoir itself since it is told from the same time frame as the reader, so it has to be a separate commentary from the modern translator. I think that there is an argument for something similar in the "Shelob's Lair" chapter of The Two Towers:

There agelong she had dwelt, an evil thing in spider-form, even such as once of old had lived in the Land of the Elves in the West that is now under the Sea, such as Beren fought in the Mountains of Terror in Doriath, and so came to Lúthien upon the green sward amid the hemlocks in the moonlight long ago. How Shelob came there, flying from ruin, no tale tells, for out of the Dark Years few tales have come. But still she was there, who was there before Sauron, and before the first stone of Barad-dûr; and she served none but herself, drinking the blood of Elves and Men, bloated and grown fat with endless brooding on her feasts, weaving webs of shadow; for all living things were her food, and her vomit darkness. Far and wide her lesser broods, bastards of the miserable mates, her own offspring, that she slew, spread from glen to glen, from the Ephel Dúath to the eastern hills, to Dol Guldur and the fastnesses of Mirkwood. But none could rival her, Shelob the Great, last child of Ungoliant to trouble the unhappy world.

This is not only a sudden change in tone, but also information which none of the characters has at the time, so I think there is a case to be made for this passage arising from the narrator/translator's explanatory role. Here, the narrator/translator can act as a guide to give us more insight into the approaching situation.

Then there are the anachronisms that sneak into the story. Sam's "Lor' help me" has been pointed out already, but there's another glaring example in "A Long Expected Party":

The dragon passed like an express train, turned a somersault, and burst over Bywater with a deafening explosion.

While there could have been a rapid delivery service for large amounts of perishable goods to be sent from one end of the Shire to the other, with the well-known hobbit dislike of complicated machinery, the only possible explanation for the appearance of express trains in a hobbit's account of the late Third Age is a modern translator/narrator. Fortunately, the narrator conceit now gives the reader a way to escape the otherwise entirely inconsistent simile.