hey waterfrog,
i suppose the language examination you refer to is the ICAO English test. to quote osupilot2008 who has written about his experience,
The pilot language assessment is about your speaking, listening, and understanding of English. It consists of different tasks which together last for about 30 mins. It will be something very similar to the questions in TOEFL: Listening to a conversation and answer the questions about the conversation you just heard. One thing about the recordings is that those recordings have accent from different counties. That's something u should pay attention on.
obviously it is used to assess whether a candidate has the ability to use (aviation) english to an acceptable level. i have heard that the results you get from this test are used to assess whether any "follow-up actions" are needed; meaning that if your score is mediocre, you must re-take the test at a future date. if you score high enough, you are exempted from this test for life.
every CX cadet pilot applicant must take this test before Stage 3 assessment, along with the aircrew medical. KA cadets take the test after they return to HKG after training in ADL.