The good news is that since that announcement Google have been working with 3rd party devs to enable interoperability.
So (AFAIK) nowadays H.264/AVC should be working and there are implementations (Telepathy/Farsight that I know of, possibly others) that have experimental video interop with GTalk.
EDIT: the original "NIHd Jingle" comment is a bit too harsh (as the drafts of Jingle spec were changing very rapidly at the time), edited for clarity.