It's a known issue that hasn't been very well documented. The decision was made to use WDS 3.0 as the indexing engine for both Outlook and OneNote in teh beta 2 release and if either program is istalled, you will be prompted to update to the new WDS 3.0 beta and cannot use the instant search features until you have done so.

Unfortunately, there is no UI for this version - only the indexing agent so if you install it, your previous install is hosed and you will no longer have the ability to conduct searches from the deskbar or the WDS application window.

All that functionality is promised back in a future release. IMO, this should have been handled differently. A the every least, the consequences of installing WDS 3.0 should be stated much more explicitly to someone who has a prior version installed.

There is an option in Outlook 2007 b2 to turn off the prompts but so far you have to add a couple of Registry keys to disable the nags in OneNote.

Also, the consequences of running two indexers for people already using another desktop search tool are considerable. You will now have two aggressive background process sets grinding away with very little visibility on your system. The WDS 3.0 background processes are very persistent. Killing the main process is only a temporary fix - it regenerates itself after a short time. It's also not battery aware and can drain your laptop or Tablet PC battery by kicking in when you're untethered.

We need at least an Options UI ASAP to cotrol that at the very least.