It’s a web application from Google that allows you to communication and collaborate in real time with groups of people so you can get stuff done. (It had been invite only, but is now open to everyone)
And a wave is …
… a live, shared space on the web where people can discuss and work together using richly formatted text, photos, videos, maps, and more.
This video provides a quick introduction: What is Google Wave?
Here are some examples of using Google Wave.
If you have used Wave before, please share your thoughts.