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This is sort of old news now, but you can now add photos to your contacts in Gmail.  Wo when you mouse over or open the contact, the photos appear.

You can add your own photo, or if the contact is another Gmail user, they can upload their own choice of photo, and you can opt to use what they've chosen.

Also, while adding photos, you have the ability to suggest the photo to the contact.  Of course, it integrates with Gtalk as well.

Click on New Features at the top right of your Gmail Inbox.