You can search all your feeds, the feeds from a folder or the posts from a single feed. In fact, you can perform two searches: one for a folder or feed and another search for the posts that contain some keywords and are from the folder or feed you've previously selected. The results are sorted by date and it takes a couple of seconds for them to show up.
It's easy to navigate using keyboard shortcuts: j for the next item, k for the previous item, Enter to read the full post and to go back to the search results, v to go to the original site.
Some small complaints: it would be nice to search the current folder or feed without having to manually select it from the list; there's a noticeable lag so search is anything but fast; when restricting the search to starred items you can't find the post you've starred one minute ago; some advanced search features would be useful (restricting to an author, a date range, posts that have enclosures). Ranking search results by relevance (with a slight bit of personalization) and clustering them à la Google News would dramatically improve the search experience, but I'm probably a nitpicker. What's important is that Google Reader has a way to search your feeds.
Update: For about a day, Opera users saw new Google Reader interface, specially designed for their innovative-but-not-very-popular browser:
