It came out in a court filing that Google's internal IM system(based on Gchat) is completely off-the-record(OTR) to avoid discovery while Google removed the OTR option for Gchat for the public.

I guess potentially incriminating conversations like the below are now held over company IM instead of company email.

http://www.theverge.com/2011/05/12/google-android-skyhook-la...