It’s opt-in per site. You have to add a specific meta tag to your pages to make it take advantage of the plugin if it’s installed. There is also a Javascript way of detecting if the plugin is installed and inviting users to install it if isn’t.

They aren’t just doing this to help IE users out however. Google Wave makes use of HTML 5 stuff that doesn’t work in IE and the beta will go public on September 30th. And however good Google Wave may be, if IE users can’t use it, it won’t be a success…