The Google Mobile blog has begun a blogseries that digs deeper into each one of the Google applications available for Android. One of the first in the series is the Search app.
Andy Stadler from Android Team explains, "Every searchable application includes a Search menu option. Some applications (like Maps) support type-to-search. Just start typing, and Maps will automatically open the Search UI for you! Some applications (like Android Market) have Search buttons, while others have Search widgets (like the home screen). Finally, on the T-Mobile G1, there's even a dedicated Search key on bottom row of the keyboard. Just press it and start typing your query".
The most important feature is Suggestions. While searching locally on the mobile, suggestions from previous searches are provided whereas if you are searching online, Google's Suggest technology is used. Search queries can be shared between different apps so you can use your music app to search for videos through YouTube.
The Search API provided for devs allows 3rd party apps to use Search like Google apps do.