I finally received the latest version of Google Hangouts. This version, 2.0 enables you to chat via Google Talk and use SMS all in one app. Integration sometimes yield a better solution than the sum of its parts. Except for Hangouts.
Google Hangouts does not do the following:
1. There is no QuickMessage With the old Message app, when a new SMS comes in, you choose have it pops up. This is no where to be found.
2. New message also shows up in the Notification drawer, just in case you missed. Using Message, there are replies and delete buttons. Hangout does not have any.
I tried sending an SMS to myself, it switches to a Hangout message, eg IM.
In summary, using Hangouts brings integration to the table and sends you back to ICS world. I hope the next few updates fix the above.