Google Wave is cool, contextual spelling isn't new
Google Wave is email (and IM) for the ADD generation. I've hated the way so-called collaborative cloud editing tools have locked documents at such a broad level of granularity; Wave would let me brainstorm an outline with a collaborator, start writing and let us keep tabs on each other so see where the story goes; that really is collaborative. There are some features I'll want to have on all the time and others I'll want to turn right off; if I'm writing a delicate IM and I take three goes to get it the way I want it, I don't want you to see the less carefully worded versions - and I don't want the draft mode option to make it obvious that I took the time to write this privately. The Wave client team are talking about offering a lot of control for that when they build the feature (it's not there yet). The notification/live message arrival is going to need some tuning; the developers mentioned in the presentation that they'd already noticed that too many new and updating messages could be pretty disruptive. Not everyone wants the shiny blue squirrel of distraction scampering over their desktop (look at the way Windows 7 removes noise and clutter and distraction so people can get more done; messages from friends you care more about than messages from the OS, no matter how important that OS message - virus alert or incoming tweet, difficult decision). It will be interesting to see how this develops and what the UI decisions are.
One note: the contextual spelling is fantastic. A spelling checker that knows what's wrong with 'the been soup has bean sitting on the counter all day' is really useful; I use that option probably more than I ought to in Microsoft Word (the main difference is that it doesn't autocorrect on the grounds that I might actually want to write something that's not gramatically correct - changing people's words too much can make you unpopular).