Hot of the presses, MSN Toolbar is out there, still a beta, but what isn't these days.
Its almost 1:00 AM here in Israel so I'll wait till tommorow to actually download and install it, I fell a need to be focused. This Toolbar promises a lot.
1. Popup blocking, autofill forms and more things you'd expect from an IE toolbar
2. Email search
3. Desktop search (indexes Office docs, pdf etc..)
4. Web Search
5. Integration to hotmail
6. Integration to the new MSN Spaces
7. Integration to Outlook
And probably a lot more that I'm missing, there are two available options, Full suite (including everything), and Toolbar only which is only the basic IE toolbar (doesn't even include autofill)
Mike Torres is raving about it... I'll see tommorow how it fares againt Google Desktop+
Truth is I saw it a week ago when Yosi was demoing for us at my company, he asked me to be quiet about it so I was... I didn't get that much of a look at it, but was very intrigued by it.
The Desktop search fight is getting VERY interesting, and no I didn't forget Copernic which is also reputed to be a very good and free engine.