Important: in order to avoid conflicts with other extensions, for the testing phase of your localization you should test whichever extension by using a clean profile!
(Then, if you want to help the author for the debugging phase, of course you can also install the extension in an old profile)

There is no possibility to rebuild automatically the xpi with your locale throughout the WTS, up to now. So if you want to test your locale you can do this :

1. Download the extension (link in the WTS or in the forum topic)

2. Download your locale folder (zipped in tar.gz) from your language page (link at the top). If your translation is still in progress choose "missing strings: filled with en-US" for testing purpose

3. Unzip* the xpi and add one locale line in the install.rdf and/or chrome.manifest file.
[*Appropriate applications] Win/Linux: 7zip, Mac: Stuffit Expander, ***:***
Add one locale line in the install.rdf and/or chrome.manifest file.
You have just to copy-paste the en-US line and modify the letters according to your own language

4. Insert your xx-XX locale folder in the "general" locale folder

5. Re-zip everything in proper order

... and now you can test the repackaged extension!

If one of these steps is difficult for you, just ask on Help section

This is a guide with screenshots.

I used 7zip to archive (zip/unzip) and PsPad as text editor

Right-click and Extract the files from the xpi

Here is what you can see inside. Now open the chrome folder

Inside you find a .jar file which is another archive file from which to extract files

You find 3 folders, select the locale and open it

Here you can paste your own locale subfolder (e.g el-GR)

Now go back a level and select all folders, right-click and choose "Add to archive..."

You must select a .jar name, but of course you must give the same original name to overwrite it 

Browse

Select the original jar

and validate OK to save and overwrite  :)

Go back one level again and delete the 3 folders, don't be afraid, they are now archived in the .jar

Now it is time to go to the chrome.manifest

Edit it (you need a text editor, sticking to utf-8) and add the locale path for your locale

Now the final archive process, save your test build with a .xpi extension