Not many Android apps can say they've been installed a billion times. In fact, before today there were only ten - and out of those ten, only three of them were non-Google apps (and all owned by Facebook). Today Google's first party messaging client, Hangouts, joins this elite group of billion-device apps... notably behind its competitors, Facebook Messenger and WhatsApp.
A billion installations doesn't mean a billion users, it means one billion different Android devices have downloaded the app once. (Phones and tablets now out of service count, multiple downloads and updates don't.) That said, Hangouts' daily users probably number in the hundreds of millions at this point, if only by virtue of its inclusion as the default SMS app on many Android phones.
Hangouts is due for a major upgrade to version 4.0 sometime in the near future. No, we don't know when that will be. According to Android Rank, the next Google app in line at the moment is Street View, though that may be overtaken by Chrome before long.