and as you type, opens a hover-window that breaks items down by "Communications" (email, calendaring, etc), "Pictures & Videos", "Files" and a bucket called "Everything". It puts the 5-10 most relavant hits in this window.
If you hit Enter in teh search box, you get a "Windows Desktop Search Results" window. The reason I like this is it defaults to showing you everything, but you can filter on type, and location!
And finally, the most important peice is the reading pane. Off to the right hand side is a preview pane, much like outlook that previews whatever you found. Email, documents, spreadsheets, pictures, even PDF files! It all shows up!
Additionally it has some quick searches, so you can type in !quote msft and the Microsoft stock opens up, or how about !calc for the calculator.
Last but not least, you can extend the power of your search by getting MSN Search Bar plug ins!. These let the MSN Search read in special files like PDF or ZIP.
I haven't really noticed it indexing, and it started working almost immediately. So if you haven't tried it out, I'd recommend it.