The new features in Hangouts include SMS blocking and contact hiding. As you might have guessed, these features give you the option of blocking someone from sending you texts and hiding a contact in the application. A new option in the settings will also appear to view and edit your blocked and hidden contacts.
Another small but helpful feature is individual notification tones, allowing you to differentiate messages from important contacts from the rest.
Something easily missable while perusing the new Hangouts application is its lack of Google+ profiles when tapping on a contact's photo. The likelihood of a user relying on this method of getting to a person's Google+ profile probably isn't great, and given the recent departure of Vic Gundotra, its not surprising to see the service take a back seat.
The update is currently rolling out to devices, and you can expect to see it available to you in the next few days if it hasn't popped up already.