Works perfectly, no idea why "the dialer went away" means "incoming calls no longer work", but hey, it's Google and it's FUD, should I bother trying to be surprised?
Don't get me wrong, Google fucked their one big chance to integrate Voice, Video, SMS and IM. With Hangouts, I should be able to "Call Someone" and have it negotiate video if we both have and want video, or it should use the next available medium. If both users use Hangouts, then send a Hangout IM. And if not, finally fall back to Google Voice/VoIp/SMS.
The users shouldn't have to ask themselves, "wait, does Bobby have Hangouts?" ever. That is literally the number one issue with G+!