And this begs another question, if it requires an install, why not work it into a GTalk client update, and include it there and through the web interface?
I had no idea they still made the client. I think they're trying to push for a fully immersed web experience that no one has been able to offer as of yet. The only thing they're missing now is Gears in Gmail.
With the Flash 10 P2P video functionality, soon almost every other social network will be offering this kind of functionality.
Nobody will be able make money off it, it will simply be used to drive adoption.
In google's case there is a further motivation, by releasing ahead of the rush of flash based offerings they get people to install a proprietary plugin, giving them a hook into your desktop.
Not everyone seems to realize this, but the video chat is based on flash. So I'm not quite sure what everything the downloaded software is doing.
For one, it does let flash access your webcam and mic without the normal security promptings, but with a 5.6MB install, I would imagine its doing more then that...will explore more later