I've been using Google Desktop Search (GDS) for a year or so. It's been great but I recently checked and it was consuming over 10gb on my main drive for the index files. That seemed a little excessive so I started looking for alternatives. Of course there is Windows Desktop Search (WDS) but a previous experience when I installed Outlook 2007 was pretty bad. I gave it another shot but the installation failed saying Terminal Services were required. TS or Remote Connections was turned on and my message on the Microsoft WDS forum has yet to be answered by anyone from Microsoft.
Believe it or not there is an alternative to both Microsoft and Google desktop search. Copernic.com has a free product, Copernic Desktop Search (CDS), that installed without issue. The Copernic index took about 24 hours and so far is only 1.87gb. I have a network drive left to index but it is smaller than my local drives so the index files should be less than 2gb.
Besides the index that is about half the size of GDS, copernics' desktop search has a great user interface and relatively speedy search completion. It also allows you to pause the index with two clicks off of its system tray icon.
Checkout their website for screenshots and more details. So far I'm pretty happy with it, especially the quick ability to pause the index.