If you hadn't caught the updated visual changes as well as a few new features which are coming to the Android version of Hangouts in the next update, which brings the app forward to version 4.0, there's quite a few changes being made by Google that users will surely be happy to see, part of which is the more material design style UI. The latest update to Hangouts also apparently brings in an Android Wear app that you can actually open and use, unlike the current state of Hangouts on Android Wear which only lets people see incoming messages and reply via voice. A proper Android Wear Hangouts app looks to finally be close to arrival.
The team at Android Police was able to grab an early look with some screenshots at the new Hangouts yesterday, and this now includes an early look at the Android Wear version of Hangouts. As you can tell from the screenshot below, the watch displays a notification which says "Hangouts: App installed. Touch to start." Once open, you can see your list of conversations with the green header bar up top to move between Google accounts if you more than one. In conversations you can see the entire thread of messages if you continue to scroll, and when you reply you can obviously reply by voice (like you're able to do now when Hangouts notifications come in) but there is also a predefined list of quick replies which includes a varied set of choices from "on my way" to "love you."
You can send emojis as well, and if your watch is running Android Wear 5.1, which it should be by the time this version of Hangouts is released, you'll be able to send emojis by either drawing or scrolling, then tapping to select and send. The app doesn't appear to support images, which sort of makes sense given the size of the screens, and for the moment there is no definitive explanation of whether or not you'll be able to send messages using voice commands, but it is possible that it could be baked into the Android Wear app at some point, even if it isn't there when the new Hangouts update goes live.