Using Unicode is the best way for a Microsoft Windows Vista/XP/2000 or Linux user to read and write Malayalam. The essential steps to achieve that is described concisely below. If you are looking for more detailed tutorial please visit Shibu's Adyaakshari blog.
Go to Malayalam Wikipedia using your browser to see whether the reading setup is already done in your system. If you don't see correct Malayalam there, please run Anjali Font Installer from the left sidebar of this page. [Further reading]
Goto Google's Malayalam input tools demo site. Type in Manglish as you would do in chat. Copy paste the Malayalam text to any site or application you choose to.
For more info go to Unicode section.
Please send a mail to gmail.com id: cibucj