Today the Etsy search has made several small changes.

1. Search dropdown menu choice has been made persistent. Previously, when performing a search under Vintage for example, the search dropdown menu would switch back to Handmade after clicking to view an item in the search results. Your dropdown menu choice is now persistent when searching under Handmade, Vintage, Supplies or All Items—until you change it. We’ve also made it easier to return to your search results from an item listing page—just look for the “Search Results” link in the breadcrumb navigation below the Etsy logo.
2. Search result sort order has been made persistent. Similarly, if you like to sort search results by price for example, Etsy will remember your preference and allow you to keep sorting search results the way you want to for the length of your session on Etsy.com, until you decide to change it (or open a new browser window and start a new session). This is another small way to help make Etsy more searcher friendly.
3. A price filter has been added to search results for Materials. You can now set a price range for search results under Materials—look for the price filter under Search Tools on the right.

Search issues Etsy is working on now include:

• Simplifying the Search Dropdown Menu
  we will be including an option to search descriptions for Handmade, Vintage, Supplies and All Items on search results pages, and making the search dropdown menu exactly that: Handmade, Vintage, Supplies, All Items. The other existing search dropdown options such as “Materials” and “Sellers: usernames” will still exist, as will the search dropdown options available from other areas of the site.
  (ed: since May 2008, Vintage and Supplies have been unsearchable by description, this change will restore that function.)
• Improving Accuracy
  Our goal is to give browsers and buyers an option to sort search results by relevancy, in addition to recency, to help them find items of interest.
  …
  Our current work on relevancy involves weighting some item fields more than others. What do we mean by weighting? We mean the importance attributed by the search engine to the types of fields being searched. For example, to return quality search results by relevancy, we may find we need to give item tags slightly more precedence than titles and significantly more precedence than descriptions.

• Redesigning the Listing Process
  we’re focused on redesigning the item listing process, which is really where it all begins when it comes to search on Etsy.
  …
  We’re taking a thorough look at Etsy’s category structure and our current use of tags. Incorporating more structure here will ultimately enable category-specific filters on search results pages, allowing users to narrow down their search intuitively. It will enable multiple ways to shop: for example by category, by recipient, by material or by technique.
  …
  Expect improvements throughout 2009. Details will be announced on the Etsy Blog, in the Etsy Forums and to the Etsy News email list.

Other areas Etsy is exploring include:

things like links to related searches on search result pages, spell-checking functionality to suggest searches for misspelled words, advertising options for search result pages and many more features we’ll discuss as they near completion

Other useful Information:
Etsy is beginning a series of Virtual Labs where they will give anyone interested access to a test area to try out different searches and discuss the future of Etsy search. The first of these sessions will take place this Friday, March 13 at 1:00 pm EDT in the Virtual Labs.

Source: this Storque article
Coommenting on that article is closed but you can discuss it or ask questions in this Etsy forum thread.