It’s fairly simple, but you have to click a little but further.
I know there should be a remove-button inside the tool-tip when clicking on the contact’s avatar, but it’s not.
- Click the “Manage Contacts” link on the bottom of you contact-frame.
- Select the people you want to remove inside contactmanager
- Then hit the remove button in the upper-right corner to remove them.
Note that only the contacts that have an @gmail.com adress will show up in the contact manager. People that only have an @googlewave.com address won’t show up.
But there’s no need to sweat. This has already been noted by the Google Wave team on this support page.