I've figured out it is a waste of an invite to Google's Wave service to send the invite to someone who already has GMail but to use their non-GMail email address.
Here is why...
To use Wave, a person is going to need a GMail account. If you send an invite to a person who doesn't have GMail (firstname.lastname@example.org), they will get asked to sign up for a Google account with GMail, Google Docs, Blogger, etc. That is fine in terms of them getting on Wave and using your invite... though they may not really have wanted to sign up for a Google account.
The problem is when the person has a GMail account but perhaps you didn't know this and used their non-GMail account. When they get the invite they will be invited to join Google/GMail.... but they already have that. They won't want to get another Google/GMail account, they can't sign into Wave using the non-Google address you sent them.... and their existing Google/GMail info won't work since that isn't the email address you sent the invite to.
Which means, if the person you sent the invite to was at all motivated to use Wave, they will ask you to send another invite but to their GMail account.... which uses up a 2nd of your limited 20 Wave invites to get the same person signed up.
So, for future reference, it seems a good use of your Wave invites (if you have any) to only send them to GMail addresses or if you want to get someone on Wave be sure to ask if they already use GMail or not. If they do, use that Gmail address. If they don't, get them to join and then use the GMail address.... or send to the non-GMail address but let them know they'll need to sign-up for GMail.