Hi Renee - yes, basically it's a much easier way to communicate/collaborate online. It'll likely replace email and chat. If you want to learn more, click on this link for a short video: http://www.youtube.com/watch?v=rDu2A3WzQpo.
It was written by Gina Trapani. She is selling the book for $6, but offering it FREE online. She will continue to update the online book. Do not feel bad about the confusion with Wave. Gina says "Google Wave is a new web-based collaboration tool that's notoriously difficult to understand.", so you are not alone!
If you are into podcasts, check out "This Week in Google". You can search for it in iTunes, and it is hosted by Leo Laporte and Gina Trapani.
1) Google Wave starts out as a simple multi-chat: several people can chat together (provided they have accounts). There's a unique plus: you can edit the chat, every single participation of the chat.
2) Then it starts looking like a super e-mail: a wave is like a long interchange of (more or less) short e-mails. Actually, keeping all the relevant mails together in a single wave makes perfect sense.
3) Then it becomes a small forum for friends and colleagues to discuss a topic per wave. Very easy and private (if you want to keep it as such).
4) The editing possibilities allow for some good text editing that turns Google Wave into a cool, fairly easy to use collaboration tool.
5) That's when you start looking at bots and gadgets and it becomes even more than all of the above.