More about Google Instant
The post says that the key design challenge was to make sure users would notice relevant results without being distracted, and the constantly changing results appearing as you type can take some getting used to. Google tested a series of prototypes and ran usability studies and search experiments to try different interfaces and search results as the user typed their search.
For the launch, Google decided on a single search model which includes the query prediction in the search box in gray text as well as results for the top prediction that update continuously while the user types. In user studies, people quickly found that they would type until the gray text matches their search intention and then moved their eyes to the results. The speed of the results changing wasn't seen to be a distraction but this can depend on the user's connection speed and browser.
This is undoubtedly a major step-forward in search engine technology and throws down a challenge for Bing to match their search experience to this. The search process will continue to develop and potentially change the way that people will search and possibly rely on the predictions made by Google.