It's cool, but since I never actually take the extra step and go to the Google page to search, it probably won't ever impact me. I just use the address bar in Chrome, which is also a Google search...
I dunno...it seems more distracting than anything. Don't get me wrong...I really like this effect in small, controlled playing fields. The Mac OS X help menu does this within an application, for example. It works well there because everything in the help menu is related to that program you're using. It's all somewhat relevant. Similarly, I enjoy it on the Apple.com store because, well, there are only so many Apple products and many of them are similar to each other. So I like it in a small pool. But what happens in the ocean? What happens when you apply it to the ENTIRE internet? It means that you often get flung from one end of the universe to the other just by adding a few letters. That's a lot different than going from "Macbook" to "Macbook Pro." The random ping-ponging on such a wide court makes me ask "what good is this doing me?" I don't really have an answer.
I tried it and think it's fine, but the thing I find funny is saying that it saves time. It's certainly more convenient in my opinion, and going from an average of 7 seconds for a search to 3 seconds may technically be 'saving time' but I think it's strange to refer to it that way. Imagine coming home from work: Me:Hi honey! I'm home! Wife: You're early today! Me: Yeah! Google Instant saved me lots of time today! Over 18 seconds! Hey! What's the mailman doing here!?!!? I'm just saying that people know it'll of course be a bit faster, but saying it saves time is like extolling the new Triple Whopper as being Sugar Free.
+1 I haven't tried it myself yet, but this is exactly my hunch. (and your post probably just saved me more time typing than google instant ever will... )