In the month of April, I noticed the biggest change in learning Japanese in the whole time I've been at it. In February and March I spent a lot time just memorizing vocabulary and reading grammars and in April it all started to sink in and for the first time I could really have simple conversations in Japanese. In April, I met and made friends who speak no English. Everyday, I read and write email in Japanese.
I guess the strangest thing is the way the grammar starts to slowly make sense through repeated exposure. Japanese grammar divides the conceptual space differently than any other grammar I've ever studied. Not only is the range of meanings of individual words different and often unexpected, but fundamental concepts are different. For example, the distinction between object and subject is sometimes different, the line between transitive and intransitive actions is in a different place and the structural relationship between individual objects and their context has a different composition. There's not really a whole lot you can do to try to sort all this out other than to just get used to it.
Like in any language, some of the rules are simply rules - they don't make any necessary sense - most, however, make good sense, it just takes a long time for someone who doesn't think in those rules to see the sense that they make.
The result of all this is that my life in Japan is starting to open up a fair bit. I don't feel as much apprehension just doing simple things as I used to, because I know I can talk to who ever I run into. I still cant' read Japanese prose, but I can at least get the gist of the signs and I can read basic conversational email.