I spend ages looking through the buttons trying to remember where the one is for creating a new message. It seems arbitrary what's a button and what's a link. Grouping of 'concepts' seem utterly arbitrary (notably the list of choices presented in the dropdown next to 'reply' in a message chain).
I just don't think I've ever been hugely impressed with googles UI credentials - everyone always seems to put them up as some kinds of genius in terms of usability but I just don't see it.
Ok, google maps is a notable exception.
Buttons represent actions. Clicking a button mutates the world. Links represent places and views. Clicking a link takes you somewhere or changes the appearance of something.
Links along the left are global. Buttons along the top and bottom of the center panel pertain to the current conversation or selection of conversations (depending on view). Links and buttons on each message operate on, oddly enough, that message.
Maybe Google's general style doesn't meld well with the way you think, but for many (most?) people, it does. It's a fantastic design.
There's a presentation about it's implementation using GWT here (I haven't watched it): http://code.google.com/events/io/2009/sessions/GoogleWavePow...
The front end technology is definitely cool, but the UI sucks.