Your comments

Well, this feature is inconsistent with other search options that I use interchangeably: search next (F3), search prev (Shift-F3), search selected forward (Ctrl-F3) and search selected backward (Ctrl-Shift-F3). All of these let me use cursor keys.

Or specifically, I end up with the following cycle every time:

  •  search incrementally for a word
  •  F3 a few times
  •  try the cursor (left/right/down do nothing) D'OH!
  • try the cursor (up changes the search query) D'OH
  • press down to search for the last thing again, find the appropriate place again
  • press Esc. The editor jumps away. D'OH!

From here:

  • press F3 to find the right spot
  • use cursor keys to move around
  • actually perform the edit

So, my beef is with both the increment search "edit" box and, much more so, with the Esc key.

IE it would be a lot nicer if Esc key just stopped the increment search. 

P.S. it would be nicer still if cursor keys canceled the search too, as that is what VisualStudio does :)