The old version, when you clicked an image it would take you to the page that contained the image and give you some controls at the top like 'view full size'. The page it took you to was fully functional. Now, when you click on the image it takes you to the containing page but it puts the image in an overlay on top of the page blocking the actual page. You can't see the page unless you close the overlay which takes you out of google image search altogether.

I don't think this is better for most people, and it certainly isn't better for me.

The scrolling instead of paging is a u no no in my book. For example I can look at 8 pages of images then quickly jump back to page 2 if I want to. I can't send a link to page 8, or bookmark it, and it breaks other u expectations. Maybe that's ok, but I don't see what gain overcomes those negatives.

You're forgetting a few properties of the new landing page. The image is at its full size, or at least at a much larger size, which is what most people want to see when they arrive at a landing page. In the old version, only a tiny thumbnail was visible. Many pages also don't have the image visible at the top, so this makes it so the image is always visible. So there are a few things that at least argue in favor of the new version.

Scrolling versus paging is a personal preference thing. I don't know the rationale behind that, but I know that some people prefer the smoothness of a scroll over the pages.