In truth, it doesn't stand for anything. It's just short, gives the idea of maleability and doesn't get in the way. If you absolutely want to give it a meaning, something like Web Application eXtensions wouldn't be that far off.
The project is still in its first stages. The codebase progresses quite fast though, and it's quite useful already. So... use it at your own risk: we won't take any responsability for scorched eyes or mutant APIs.
WAX is Free Software. The core framework (python modules and generic resource set) is released under the LGPL, while resource authors can use any compatible license they feel comfortable with.
Javascript has a very bad reputation. Once you get to know it though, it's actually a very flexible and expressive language that's far more capable than people would concede. Coupled with the WAX API, writing your application logic in it is a breeze.
That said, we too look forward to the day when browsers seamlessly support python, java, .Net/Mono or other similarly robust and powerful languages. When that day comes you should be able to develop your WAX components using any of those languages.
The problem with web design is apparent, and there's a clear demand for tools that enrich the end user experience and ease the effort needed by developers to create such products. Mozilla's XUL, Microsoft's XAML and Macromedia's Flex are just the more prominent incarnations of a new wave of web design tools.