First generation email/IM integration let you see when someone was online, and opt to instant message someone rather than send them an email. Wave simply erases the distinction.
If both people are online at the same time, a wave acts just like an instant message -- except that you see each character as it is typed, just like in subethaedit. "In our experience, a lot of time in IM is spent waiting for the other person to press 'Done'," says Lars. (However, it is possible to set Wave to hold your messages till you are done.)
A key point here is that Google's relentless focus on reducing the latency of online actions is bringing the online experience closer and closer to our real world experience of face-to-face communication. When you're talking with someone, you know what someone is saying before they finish their sentence. You can respond, or even finish their sentence for them. So too with Wave.
The real-time connectedness of Wave is truly impressive. Drop photos onto a wave and see the thumbnails appear on the other person's machine before the photos are even finished uploading.
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