It appears that Google is looking for new ways to enhance (erm, monetize?) Search Suggest. Danny Sullivan notes at Search Engine Land that some users are spotting Google AdWords ads within Search Suggest, as seen below:

Search Suggest is also apparently expanding news results and more.

In terms of ads, though, Danny notes that the placement (top?) is questionable. What happens if someone accidentally clicks on that ad? It’s easy for someone to slip up when using a drop-down box. I’m sure you’ve done it before.

That concern is echoed in Sphinn by advertisers. Here’s one good comment:

Someone else adds that those ads probably “convert like [censored].” And he’s probably right.

Forum discussion continues at Sphinn.