Google Hangouts Now Supports HD Video, Soon Powered by Plugin-Free WebRTC
However, more notably, this development foreshadows a move to more open standards and a plugin-less world of video in web browsers. Google has been transitioning to the open VP8 video codec from H.264--a change invisible to end users other than the fact that the video might look a little cleaner--and VP8 will also enable the HD quality in Hangouts.
(Credit: Gigaom)
The next step is that Google will be using the WebRTC standard for Hangouts. WebRTC is a free and open project that uses Javascript APIs to enable real-time communication in web browsers, which obviates the need for plugins, and as a native HTML element, it would be easier to add overlays.