I wave as more of a personal exercise in alertness than anything. I try and be as observant as possible when I'm in traffic, and looking for other motorcyclists gives me a reason to always be looking around for potential dangers. If I happen to miss another person on a bike and notice them after they're already behind me, that could've been a car coming at me that I wouldn't have seen, or a small animal, something like that.
Of course, you have the community aspect of it, too. Had a wonderful conversation at the bank the other day (1 in the afternoon, I was the only one in there) with the teller. She had an r6 but had started out on a 250, etc. It's nice to be able to just start talking with someone you may not have anything else in common with.
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Motofool, I had an experience similar to that a couple months ago. I was with my mom, we were going to the store or something, and there was a guy on the side of the road with a yellow suzuki, supposedly out of gas. Turns out, he was on his way back from buying it, and didn't know about the reserve function that most bikes have. Easiest fix you could hope to have, thankfully. We exchanged conversation and all that fun stuff. It feels good to be able to do that sort of thing.