From the Google Talk Blog: tips on using Google video chat, from one of the engineers on our team.
Did you know you could use the "pop-out" arrow on the top of a chat window to make a video chat bigger? This will separate the video chat into its own window that you can resize and move around as you like.
If you want to make the video chat as large as possible and block everything else out, simply use the Full Screen button in the top left corner of the video area. This will fill up your screen and make your conversation much more immersive. Based on the feedback you've given us, we have added the ability to mute your microphone while in full screen mode. To do this, simply hit the space bar!