Because Powell knows as well as anyone that the press in these countries is government controlled and there is no freedom of the press there. He was asked a specific question why the US doesn't ask those governments to stop the incitement. To claim freedom of the press to allow them to print anti-American, anti-semitic incitement as the answer is a big copout. Powell is playing games by making it look like these countries are free etc. when in reality nothing gets printed unless the government approves it.
You ask "Why WOULD they want to say what they think the US wants to hear in English and what they really meant in Arab or something? "
The answer is very simple, money and US support. The US gives Egypt more then 2 billion dollars a year, therefore the government makes nice to the US and in English sounds moderate. The same with Saudia Arabia, Arafat, etc. They don't want to lose US support so in English for the Western media they try to sound moderate.
As to why they don't "double speak" among themselves, the answer is simple, it is easy to doublespeak to the US because very few people in the US speak or read Arabic and therefore it is easy to hide from the West. However, their neighbors do understand Arabic and therefore how would you like them to "doublespeak"?