Vic Gundotra just announced what we've all hoped for (and kind of already anticipated): SMS is coming to Hangouts. Yes.
Aside from that, you'll also be able to share your location with a simple tap. Oh, and GIFs. Prepare for all sorts of animated crap in Hangouts. It's happening. Unfortunately, we're not exactly sure when it will be happening – there's no word right now as to when the updated APK will hit Google Play.
Let's hope for today. Nope. It'll be out "in a few days." Sadface.
Hangouts on Air is also getting a nice update today, which will bring the ability to plan a HoA, promote the content within, and manage the HoA like a producer would a TV show.
Lastly, Hangout video calls are getting a slight makeover that adds full-screen video calls across all devices, as well as automatic adjustments that will correct bad webcam lighting. Today's updates are definitely all about "the power of Google" making your life better and improving the quality of videos and images.