After a few days of usage, a handful of thoughts of Google Instant: 1. It's a technical feat: fast, inteliigent, and useful. 2. It's a design feat. Gorgeous, clean, simple and very Google (and Facebook to that extent).
3. It will have a significant impact on SEO and SEM... though I think we are all unclear exactly what it means yet.
My early thought is that it moves power to towards the head rather than the tail. For instance, more value will be placed on head terms and shorter queries - in other words, before the search is refined. For SEM that means that more bidding, traffic and clicks will be driven to those terms... and therefore they will cost more and CPMs will rise.
4. Today it requires you to search from Google.com. For most users, that is fine. But I am not sure that is the way we will behave in the future - and its certainly not I how use Google. My searches all occur in-browser... so Google Instant doesn't apply unless I do a secondary search / refinement.
5. That said, this has significant implications for Google Chrome. Imagine Instant applied to the browser... or to the OS, desktop, etc... Chrome and Chrome OS should utilize Instant across the browser and across other Google properties.
6. I believe this will mark a trend of companies that mimic the UI and design (which I am all for). Over time, this will be a very familiar interface and interaction.