A wave is the equivalent of traditional email, except this time the messages won't be sent or received, but will stay in your Wave account available to be read and edited by any of the recipients and its creator. These messages can be replied to just as you would when using an instant messaging client.
The process of including contacts in a wave is very similar to opening a multiple conversation within any instant messaging program. All of the contacts included in the wave can interact with the message, replying or editing the messages and their replies.
Waves allow for the insertion of images and videos, and it incorporates tools for their visualization and playback. Their insertion is done in real time as well, making it possible to even witness your upload's progress.
And as if this wasn't enough, Google Wave supports extensions that further expand this system's communication possibilities in real time.