I like git, Mercurial, Bazaar but my favorite recently is Mercurial. Both Python and Google Code switching to Mercurial. The funny thing is Mercurial might win because of this. Google code played a huge role in SVN becoming so popular.
Both Mercurial and Bazaar are Python based. Git is C based and written really for *nix in mind only.
And the second reason is that git is downright slow over HTTP, and google code's built around using HTTP.
The past has shown that all real future innovation in version control will come from new products, not established products... Five more years of Git vs. Hg is probably not going to help innovate version control systems.
I see git vs. hg as a KDE vs. GNOME type thing -- similar products, yes, but with different underlying philosophies and presenting the same ideas in usefully different ways.
I don't know about the HG/CVS possibilities, but I wouldn't be worried about DVCSes.
And, on an unrelated note, I'm really happy about Google's decision. I evaluated git a while ago, and I found it kludgy and awkward. A revision control system should stay out of my way and be a useful tool, not become a full-time job with an equivalent learning curve.
Now google has probably put the balance back to a tie between the two systems- Git probably was in the lead before this announcement.