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In Windows Server 2008 and in Windows Vista, the Do not search files user policy setting does not work as expected. After you enable the Do not search files policy setting, you can still search for files by using the Start Search box on the Start menu.
However, you cannot use the Start Search box on the Start menu to search for files when you enable the Do not search for files policy setting on the Taskbar and Start Menu item in Control Panel.
This problem occurs because Windows Explorer does not correctly read the Do not search files policy setting that Group Policy writes to the registry.
Microsoft has confirmed that this is a bug in the Microsoft products that are listed in the "Applies to" section.
Steps to reproduce the problem
On a computer that is running Windows Server 2008, create a text file that is named "Test.txt."
Click Start , and then type test in the Start Search box. Notice that the file that you created in step 1 appears in the Files list.
Click Start , type gpedit.msc in the Start Search box, and then click gpedit in the Programs list.
If you are prompted for an administrator password or for confirmation, type the password, or click Continue.
In the Local Group Policy Editor, expand User Configuration, expand Administrative Templates, and then click Start Menu and Taskbar.
Under Setting, double-click Do not search files.
In the Do not search files Properties dialog box, click Enabled, and then click OK.
Note You may have to log off and then log back on the computer.
Click Start , type test in the Start Search box. Notice that the file that you created in step 1 appears in the Files list.
Windows Server 2008 Standard, Windows Server 2008 Enterprise, Windows Server 2008 Datacenter, Windows Server 2008 for Itanium-Based Systems, Windows Web Server 2008, Windows Vista Business, Windows Vista Enterprise, Windows Vista Home Premium, Windows Vista Home Basic, Windows Vista Ultimate, Windows Vista Business 64-bit Edition, Windows Vista Enterprise 64-bit Edition, Windows Vista Home Premium 64-bit Edition, Windows Vista Home Basic 64-bit Edition, Windows Vista Ultimate 64-bit Edition