Bare minimum - I think those two words can best describe this first beta of Google Talk.
But that might not necessarily be such a bad thing if the folks at Google move in the right direction from this point on. The UI is extremely clean and minimalistic in true Google-style. I really like the design of the contact list - it's uncluttered and the searchbar that filters contacts as you type can be very handy for people with long contact lists. I wasn't too happy with the IM window though - it's a bit too minimalistic for me. I'd like to see basic text formatting options (simple B, I, U buttons for bold, italics and underline would suffice) and I think the messages could be laid out better.
There's no support for file transfers yet, which was a major negative for me, but I'm pretty sure it's high on the list of things to do. All in all, I wasn't particularly impressed, and I was ready to hit the uninstall button. It felt like YAJC (Yet Another Jabber Client). Until I tried voice chat, that is.
For voice conversations, this thing is simply awesome. It punches through a NAT/firewall with absolute ease and the connection is established almost immediately after pushing the "Call" button. Skype had a slightly longer connection delay and MSN Messenger simply couldn't connect at all with the firewall policies that are enforced on this wireless connection I'm on currently. Once connected, the voice quality was exceptional. Skype didn't stutter, but it had a noticeable lag (this is a wireless connection, remember). Using Google Talk felt like a regular cellphone conversation. I never thought we'd see a Skype-killer so soon, but it looks like we have one, at least for those of us who don't use the paid services that Skype offers.
Google now needs to focus on implementing core features, especially basic things like group chats and file transfers. Video support would be a superb thing to have too, especially if the ease of connectivity and the quality is as good as the voice feature.
Unfortunately, unlike Skype, the IM client itself is not cross-platform, so Linux and Mac users are out of luck. You can still connect to the server using any client that supports Jabber/XMPP, but voice conversations won't work, and that's pretty much the only killer-feature in Google Talk so far.