This is controversial, and it depends who you ask. Bill Gates actually is quoted as saying that Web 2.0 doesn't exist.
It's generally seen as being new large web sites such as YouTube, MySpace and Blogs - in other words, web sites which are heavily driven by user-supplied content. Web 2.0 also refers somewhat to many new scripting languages being used to power these new sites. Programming buzz words like "mash-up" and "Ajax" also surround the Web 2.0 phenomenon.
I think Bill Gates is right - a few new scripting languages and a couple new websites doesn't equal anything revolutionary.
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