At EpipheoStudios.com they have attempted to answer this question with the following video:
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.
http://wave.google.com/help/wave/about.html
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