Per Google Hangouts update 2.1, texts and Hangouts for the same contact will be merged into a single thread.
How will you be able to distinguish them? by seeing that they’re color-coded, as well as the on-screen option of either sending a text message or one via Google’s Hangouts.
Also included in the update are a new homescreen widget and improved video chat quality. The update is now live for Android users on the Google Play Store.