I'm really stoked to see this. It's a very intuitive user experience. The fact that search refreshes as you type, to me, means that it's an active state of something that used to be the typical call and response. It will be interesting to see if this pattern starts to permeate into other areas of search, say, in your companies intranet site, or your file structure on your mac.
What I find fascinating about this whole thing is that this is not entirely new. Yet it took Google to kind of rework their own data and then market it to make people aware of it on a large scale.
People who I wouldn't even think to comment about searching online have mentioned this to me. It's strange. Has Google taken something as ubiquitous as 'search' and made it sexy again?