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On complex collaboration tools
This is why Google represents the antithesis of Apple. With Apple, it's all about simplicity. I once joked that at Apple they don't start with the product, they start with the advertisements. If they can't think up a good ad--if they can't tell you, in a few words, what this product does and why you simply must have it--they probably won't bother making the product.
Not sure I'd go so far as "antithesis," but good commentary overall on overly complex gee-whiz collaboration software.
If you can't explain what you've built, there's a problem.
See also: Google Wave doesn't stop information overload
Your "ad first" theory is how the cereal industry, toy, and to some extent P&G and Nike do it. They find what connects with consumers and will sell via 30 second spots. Then go figure out how to build it. Engineers love to abhor this theory... Good thing Google monetizes through advertising; don't think many would pay MS Office prices for their apps. "Free" also gives them lots of latitude about keeping software in beta for years and away from certain performance scrutiny. Not to mention a profiled data trail of where logged-in users go online.
I don't buy the theory that every product needs an instant-explanation factor to be successful. Many sites (such as Facebook) are not immediately apparently useful, for example. It takes time to play with them to realise their value.
With Wave, it is extremely ambitious but the essential functions of it are not hard to grasp. There are some good ideas in there (like the live text), also some bad ones (like the way bots are implemented) but it's not hard to grasp what it is and what you could use it for.
What Wave needs is embedding of Waves themselves. I want to be able to place a Wave on a Google Site and use it as a scratchpad/forum for other users to comment on a text. Or help draft new text. The inbox/dashboard is nice but it strikes me that it's not the best function to be using Wave for.