Google has changed the way that searches are performed, but only for some users. These users need to be both
For this group of users, Google Instant begins offering search results as soon as you start typing; the results are different for each individual (because it depends on your web history; you only get it if you're signed in to a Google account); and the results change as your query changes, whether longer or shorter (using AJAX, the same technology that preloads Google Maps and lets you slide them around).
Matt Cutts of Google has stated in a post on his own blog that the effect on the "long tail" of results
"The search results will remain the same for a query, but it's possible that people will learn to search differently over time. For example, I was recently researching a congressperson. With Google Instant, it was more visible to me that this congressperson had proposed an energy plan, so I refined my search to learn more, and quickly found myself reading a post on the congressperson's blog that had been on page 2 of the search results."
But what about AdWords? After all, that's part of the advertising engine that keeps Google running.
Indeed Google itself is warning, on its Analytics blog, that "With this change, you might notice some fluctuations in AdWords impression volume and in the distribution of organic keywords. For example, you may find that certain keywords receive significantly more or fewer impressions moving forward." Plus, webmasters will see more "impressions" - because Google Analytics will count it as an "impression" if a site simply appears in the search results for 3 seconds.
The mantra remains the same. Effective management of a website is a continuous process of review and respond. Analyse the data and respond in a thoughtful manner.