A Bose-Einstein condensate illuminated by a single off-resonant laser beam ("dressed condensate") shows a high gain for matter waves and light. We have characterized the optical and atom-optical properties of the dressed condensate by injecting light or atoms, illuminating the key role of long-lived matter wave gratings produced by the condensate at rest and recoiling atoms. The narrow bandwidth for optical gain gave rise to an extremely slow group velocity of an amplified light pulse ( approximately 1 m/s).