Here's the review I just posted of the new Hangouts app for Android. I kept silent on the issue because of a project we were working on but since Google has not seen fit to announce corrections for this, I'm going public.

"For me, the new Google Hangouts is much worse than Talk for my purposes. I lost all my client and colleague contacts that were XMPP/Jabber contacts. For me that accounted for about 60% of the people I actively chat with.  That's a major feature regression - which was NOT warned about.  Also, it drives me bonkers that in the new Hangouts you cannot get real presence notification - i.e. online, away, etc. In short, Google took 1 step forward and 6 steps back here. If they're not going to support XMPP then they had better be rolling out FULL SIP support - including presence - for us enterprise users. This change is a deal killer for us. We will cancel out Google Apps for Business service at renewal and move to another platform if this is not corrected."

Here more info on the issue:
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