Google Wave is a project announced by Google on 28th May 2009 at the Google I/O conference is expected to release later in 2009. This will be a next generation email subsystem designed to merge email, instant messaging, social networking & wiki featuring strong spelling/grammar checking & automated translation between nearly about 40 different languages.
The term "Waves" described by Google as "equal parts conversation and document", means any authorized participant can reply anywhere in the conversation, they can edit or can add more participants during the conversation process. All the participants will be notified of changes or replies in all the waves they are actively participating & all the modifications will be seen at real time, letter by letter. Not only this, multiple participants may edit a single wave simultaneously in the same context.
This ability of Google Wave will let user to create collaborative documents modified in different location with full modification history, which can be searched by an user to view/modify any changes just like wikis.
More information about this is available in Google Wave Site.