Google Wave is infact three things: a tool, a platform and a protocol. At the heart of Goolge Wave architecture is Operational Transformation (OT), which is a theoretical framework meant to support concurrency control. Waves are hosted XML documents these support concurrent modifications and also latency updates.
The paltform comes in open source api and developers can extend it using robots and gadgets. Gadgets
are tiny programs which run inside of a wave and robots are “automated wave participants.” Wave can be embedded in blogs and other comunication mediums.