Sometimes I type in German and sometimes in English.
I seem to be only able to switch on autocompletion for one language and have to add the words of the other language one by one to the dictionary.
Is there a better way for those people who are multilingual?
Yes, you can do this. Here's how:
Note: I'm on Froyo (Android 2.2), so if you're on a different version it may be slightly different.
You're now set up for German and English.
Here's how to test it:
Once < German > is selected, you're now using the German keyboard. Swipe again to return to English.
As Bryan has rightly said by installing third party keyboard apps will be helpful. Try an app like the SwiftKey Keyboard.
It has a multilingual keyboard support and is much better in typing when compared to the stock keyboard provided.
What about installing an alternative keyboard, like AnySoftKeyboard with appropriate language packs. (It's free/libre/open-source software, and it's available from http://f-droid.org, which means that it was independently rebuilt from the sources. So you have another guarantee that it doesn't spy, by the way.)
Configure it for multiple languages, and choose it as your default one.