This is a game changer. Hangouts need this ASAP if it wants to be taken seriously as the next SMS app.
Hangouts needs far more than just this to be taken seriously. The whole app and service needs a major overhaul.
I love the new update so far. Before I only really used pushbullet for sending links between phone/tablet/pc/laptop. Now that SMS actually shows the conversation, I've been using it all day.
I love hangouts, but it's just not at the point to where I would ditch other SMS apps. I really hope they spend some more time on it and get it there. It has so much potential!