Google Instant is a very clever move by Google but I don’t see it having a visible effect on most websites.
The reason Google has done it is the same reason they implemented the automated search suggestions that appear when you are typing – so that they can direct you to more commercial & profitable search queries.
By teaching people to use the right search queries they are able to show better search results with more targeted ads which attract higher cost per clicks. Google wins and so do searchers.
We’ve not seen any impact from Google Instant so far and the chart below from Conductor shows that the impact in search query length has been minimal.
I don’t understand how people can say that it affects SEO in a negative manner because people still search and still see the same results in the end even though they might end up using a slightly different query than they intended.