Google Wave is pretty hard to conceptualize if you have not watched the video. I will try to explain it in Google marketing speak:
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 is 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 live. With live transmission as you type, participants on a wave can have faster conversations, see edits and interact with extensions in real-time.
Basically Google Wave in its most simplest form is a combination of email, instant messaging and wikis. You have an inbox which recieves "waves", and you can reply to them in real time. These waves remain private, but you can easily add users from your contacts on the left. Now these new users can try to follow the conversation (which can contain multimedia elements) by reading through it, or they can replay the conversation in the order it was created.
One can only imagine how this would contribute to collaborative software - no more setting up difficult meetings and messing with network settings. Wave will also have an open API which can enable developers to quickly add more functionality to its rich media features.
