What is it? Think about the way we send email now and throw it out the window. Email was invented long before the modern internet and is based purely on snail mail. Google wave has replace a standard mail box with a "Wave". You create a message and then attach any of your contact(s) to the message and they can log on to their Wave account and read your message.
Think about Instant Messaging. Think when you sit there and stare at the screen as you see "Typing" while you wait for the message to be sent to you. How instant is that? Google Wave combines the same features of IM but they are truly INSTANT. Imagine your contact that you attached to your new Wave to logs on and reads your message, then they start to respond to the message, you will see in REAL TIME what they are typing. They do not even have to hit the Enter key or hit any send button, it is instant.