It still lets you chat with your friends like it always has, but now the service is based on Hangouts instead of a simple peer-to-peer type of communication. Leveraging the power of Google’s network will help deliver higher reliability and enhanced quality. The update goes beyond just that though. Now you will not only be able to reach your buddy in Gmail, but also on G+ in their browser, their Android device or their iOS device.
All users will benefit from this, but wait there’s more. If the person you are chatting it up with also uses Google Plus, you get the added ability of adding in 9 friends, watch YouTube vids, use Google Docs and share your screen.
Now if they would just make the Google Talk client on the PC do a little more I would be happier.
Source: G+ and Gmail blog