Google Wave is a new model for communication and collaboration on the web, coming later this year. You should think different and change what you suppose means to be communication and collaboration. It’s not just a new product or technology it’s a total new exciting model!

What is a Wave?

A wave is equal parts conversation and document.
People can communicate and work together with richly formatted text, photos, videos, maps, and more.
* A wave can be shared.
Any participant can reply anywhere in the message, edit the content and add participants at any point in the process. Then playback lets anyone rewind the wave to see who said what and when.
* A wave is really live.
With live transmission as you type, participants on a wave can have faster conversations, see edits and interact with extensions in real-time.

What Google Wave can do:

* Google Wave manages every things
As you create, as you type, as you add participant… Google Wave reflect your wave and it’s changes live so it makes possible real-time collaboration.
* Google Wave is an extensible and open source platform
So everything is possible in its rich platform, and you will find and can create any extension to do anything. You can collaborate and communicate with your blog, facebook, twitter and real-time or even embed your waves in every thing and it will reflect your changes instantly form each party!
* Google Wave servers can communicate based on its protocol
I should say just like how easily email servers communicate this days!

For more check the video in Google Wave preview page

Reference
About Google Wave on Google