It's about damned time. I've been using Reader for about a year now, and my biggest issue with it has always been that it didn't have a search feature. I mean, it is a Google product, isn't it?
Another big improvement (for me) is that, if you have more than 100 unread feed items (which happens every morning following a decent sleep), it no longer just says 100+, and actually shows you the count.
Awesome! Awesome!
UPDATE: In Read/WriteWeb's coverage of the news, I was even quoted! Yesterday I made the following comment on that blog:
I'm a loyal Google Reader user, but if they don't hurry up and implement a search feature very soon, the first company who does will win my service.

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It's too bad Richard from R/WW didn't link to your site!