On Monday we told you that Google may bring video chat to Android 2.3.4, and that we expect an announcement at Google I/O. It looks like we got it half right - Google has officially announced Talk with Video Chat integration in Android 2.3.4, but we didn't have to wait until I/O to find out.
The service looks like it will work almost identical to its desktop counterpart: the status icon displays whether or not the person is available for video chat (or capable of it). Tap the icon to start a video chat session, and you're good to go. It's cross platform, too, meaning that you can chat with desktop users and other mobile users alike.