It used to do XMPP federation too; they might still be exposing XMPP C2S but federation is long gone.
Fun fact: if you were on a non-Google server talking to someone on Google Talk and they clicked the button to "upgrade" to Hangouts, on your end they would show up as perpetually "away" and any messages you sent them would be blackholed. Yes, that was as frustrating as it sounds.
- Google used to support XMPP federation, and they pulled the plug on that years ago.
- Any new features introduced as part of Hangouts haven't been backported to XMPP, and so there may be random breakage when XMPP users talk to Hangouts users.
Me too, right now using pidgin to communicate with coworkers via Hangouts. Tried everything to set it up with KDE Telepathy (I know, I know - it's just my personal account is still working with it) to no avail.
I'm fairly certain that I'm using Pidgin's XMPP functionality to communicate with others that are receiving their end in Google Hangouts.