John Battelle's excellent interview with MSN search engineer Gary Flake reminded me of a long talk I had with Andy Edmonds in New Orleans PubCon last year. Andy is a former Mozilla geek now working at MSN to determine search relevancy. Andy is VERY sharp and reminds me of guys like Jeremy at Yahoo who can see far beyond the narrow corporate interests into the heart of what's up with the evolving internet. (though they rightfully are sometimes protective of those corporate interests).
Also, at MIX06 I was impressed with how hard the LIVE search team was working and felt that they are getting the resources and respect needed to make big changes at MS in search.
Back in June of 2005, Andy was very optimistic and obviously sincere in his assumption that relevancy at MSN would equal Google's sooner than most were thinking It's not happened yet but the Flake interview suggests that Microsoft's use of artificial intelligence in their algorithm is improving fast. If as Gary suggests MS has a superior configuration (using a 64 bit architecture) that will allow deeper analysis things MS search could get very good very fast.
I won't hold my breath, noting when talking to guys at Google and Yahoo they tend to dismiss MS search as "hopeless". Part of this is their ego talking but mostly it's an assumption that Microsoft no longer is doing bleeding edge research needed for a breakout in search quality. People at MSN like Gary and Andy challenge that assumption.