Hangouts has replaced the Google Talk app on mobile devices.
It's the default chat in the new Google+ as well. But Hangouts is optional in Gmail; users can switch over to it but they can also switch back.
There's a good reason for this, as Hangouts loses some of the features still available in the Gmail chat, like the ability to make phone calls.
Gmail users have been able to place calls from inside Gmail to any phone in the world for a few years now. The calls are even free in the US and Canada and Google offers cheap rates elsewhere.
However, the phone call option is gone from the new Hangouts app in Gmail, there's simply no dial pad. Users can start a Hangout with other Hangout users, but that's it.
Fortunately, users can revert back to the old Gmail chat, for now. All they have to do is click on their name in the Hangout and select "Revert to old Chat."
Google is still working on adding more features to Hangouts, so maybe phone calls are coming back. But Google may also kill off the feature along with the old chat at some point.