Community Manager for Hangouts/Chat at Google has revealed that the new Hangouts app will receive SMS integration. In a reply on Google+ he said that it will be coming soon and is one of the most requested features. How long until it arrives is unknown.
This will be super handy once implanted as users won't have to go into two separate apps to read messages. We assume this will only come to Android as we don't think Apple allows other applications to receive SMS over the default messages app.
Source: Dori Storbeck on Google+