I first did this with CongreGATE.

Assumptions

1. You are using WordPress permalinks with mod_rewrite or a similar option.
2. You don’t have register_globals() turned on. Turn it off to ensure WordPress’s global variables don’t get removed by Kohana.

Renaming

First, you need to rename the __() function in Kohana. Say, you rename it to __t(). You’d need to replace it everywhere it appears, which if you use an editor like Netbeans that can find usages of a function or method is pretty easy.

Hierarchy

The next decision you need to make is whether you want to load WordPress inside Kohana or Kohana inside WordPress. I prefer the latter, which I’m documenting below.

I put the kohana directory in my theme directory.

In your functions.php file of your theme, simply

include TEMPLATEPATH . '/kohana/index.php';