I got the update a couple of days ago. It's not terrible, but it is a bit slow to send SMS messages, plus it appears to have eaten an incoming MMS; I got the "Tap to download" message in Hangouts, but nothing ever comes through, while the Messages app doesn't show it at all.
It seems pretty obvious that Hangouts as currently implemented is just a front end for whatever services you use, hence the ability to concurrently use the Messages app (+) as well as the lack of conversational continuity (-).
I'm hoping this is still early days, and that a tighter integration is in the works.