Earlier quoted context omitted.
Yes, part of it was marketing, but there were benefits, too, e.g. for slow typers, which of course do not abound in this corner of the Internet.
In my experience these slow typists also tend to look at the keyboard while they are typing - not at the screen. Thereby completely negating the benefit for this group of people. I guess that for the intersection of slow typists who look at the screen while typing, Instant Search is useful. But how big is this intersection really?
One of the amusing things was that users would follow the instant results without necessarily being consciously aware of them. I.e., when describing their interactions with prototypes, only a few noticed and pointed out that they were getting results without pressing Enter, yet a larger number clicked on them. It had to be pointed out to them, at which point they would often go "whoa". I remember a few non technical users who really raved about it.