Spotlight begins to work the moment you begin typing characters into the box.  As you continue to enter characters Spotlight intelligently adjusts what it has located.  For example, type "iTunes" but as you type each letter, just watch how the search results change as you type.  As Spotlight finds things, you can click on them with your mouse or select them with the keyboard arrow keys and the return key.  Once you have finished entering the search string, Spotlight will return any and all things on your Mac (stuff that has "iTunes" metadata) related to "iTunes".



Once a search has been completed you will see a "Show all" option.  If you click on it a new window will appear detailing all the results.


You have numerous options from this point.  You can sort in many different ways such as by kind, date, and location.  Really cool!