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Is the search widget built into SH2 or is it downloaded from the market?

Built in. You can theme the Background and Frame just like any other block type. :)

I hadn't used the updated theme yet and assumed it was search functionality like that on the iphone where you can search everything (ie. apps, contacts, etc.). It's the web search, got it.

Huge fan of this theme. You killed the 3 dots?

Well, I wanted something that look balanced along side a search icon. I might change this a little still. Might put the search up the top... :)

Which reminds me a REALLY need to upload the PSD so people can use my grids and remove/add menu items.

(also if you edit the menu image and drag it to the right to show full screen, the 3 dots are still there) ;-P