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Gmail now has video chat!
You can now chat by installing THIS PLUG-IN.
Mashable has tried this out, and these are their reports:

The plugin works in all major browsers (I’ve tried it in the latest version of Firefox) and installs on all of them automatically. After you’ve installed it, start a chat with someone and enable the new functionality from the Options menu at the bottom of the chat window. If you don’t have it yet, you’ll get it soon; Google is gradually rolling out the new feature to all users starting today.

Google also released an instructional video: