Every searchable application includes a search menu option and may also include search widgets or support type-to-search. Certain phones, including the T-Mobile G1, will have a dedicated "search" key, and Google Suggest technology (which suggests possible search terms as you type) is integrated.
Google's own applications can share search capabilities with each other (e.g. a music player application can call up the YouTube application to display video searches) and Google has provided an API, documentation and sample code to allow third party developers to implement searches in their applications.
Watch the video for more information on Android's search.
source: Google Mobile Blog