Does the search in Finder need spotlight

On my system, typing successive letters always shrinks the results menu. Have you tried rebuilding your Spotlight index? Open terminal in an admin account and type:

sudo mdutil -i on "/Volumes/YourHardDiskNameHere"

, authenticate with your password, and go get a coffee.

Edit: Another way to accomplish this is to open Spotlight preferences to the privacy tab and drag your HDD icon from finder onto the "Prevent spotlight..." list. Close preferences (may not be necessary - ?). Open it again to the same tab and use the +/- buttons to delete the disk. Re-indexing should start.

If you're happy with the terminal you can use the find command.

Something like opening Terminal in Utilities.

cd <folder name>
find . -name <whatever you're searching for>

Once found you can open it up with open

So, I can do something like:

alex@smiley:~|⇒  cd Desktop
alex@smiley:~/Desktop|⇒  find . -name Mac*
./Mac Pro.spx
alex@smiley:~/Desktop|⇒  open Mac\ Pro.spx

Notice that I used the * as a wildcard to match all files starting with Mac