Wayland is a protocol for windowing systems on both desktops and embedded
Wayland is a display server protocol for a compositor to talk to its clients, as well as a C library implementation of that protocol. The compositor can be a standalone display server running on Linux kernel modesetting and evdev input devices, an X application, or a wayland client itself. The clients can be traditional applications, X servers (rootless or fullscreen) or other display servers.
Wayland is a simpler replacement for X, easier to develop and maintain. GNOME and KDE are expected to be ported to it.
Part of the Wayland project is also the Weston reference implementation of a Wayland compositor. Weston can run as an X client or under Linux KMS and ships with a few demo clients. The Weston compositor is a minimal and fast compositor and is suitable for many embedded and mobile use cases.