In Google Wave, “waves from which all participants have been removed are wiped from Google’s servers permanently.”
To be more specific: “When you’re removed from a wave you’ve seen before, whether you remove yourself or someone else removes you, you’re given a chance to acknowledge that you’re OK being removed. At the top of such waves, there’s a button that says “Delete my copy”. Until you click this button, you keep a copy of the wave up until the point you’ve been removed.
You can keep that copy forever. We delete only waves where all participants have been removed, and none are keeping a copy.
Currently, “Delete my copy” does the same as moving the wave to trash, but this may change in the future. Previous releases of Google Wave didn’t have “Delete my copy” button; moving to trash was the only way to delete your copy,” explains Google.
More Info: Help Forum