As people have said, it is another attempt by Google to get into the social scene (everyone seem to forget about orkut, wave, buzz, etc). This attempt looks pretty good though.
It gives you a lot more control over who sees what. You can post things publicly (like doing a blog post) or you can control who sees stuff (e.g. share pictures you and your friends drunk at a party together, only with your friends, and with resharing turned off).
The “hangout” feature is pretty cool. I allows you to easily video chat with up to 9 other people. You can easily share youtube videos too. It’s actually a pretty fun way to share the latest funny youtube videos with your friends. However, if you look at the source code, it looks like google is going to integrate it more with gmail and calendar, so it might be more compelling for a business video conference.
My friends with android phones seems to be using the photo album stuff a lot. It has some picasa integration too. I haven’t done much with them myself yet.
Out of everything, I’ve used “sparks” the least. It is like google alerts (I suspect it is the same backend), but in a stream. I set up a few, but nothing really interesting yet. I’ve found that it’s more interesting to add people to my “following” circle (the same way I follow people on twitter).
Also, it is really easy to control who sees what part of your profile, e.g. the public knows I’m male and married, but only my friends know my location and email address. It is easy to view your profile from different circles (e.g. I can check that you can see the company I work for only if you are in one of my circles)
(I like it better than Facebook)