Someone once told me that if your site can’t do search like Google does search, then you’re better off not having search on your site.
And you know what… everytime this assumption has been tested it has held up. And more than likely will continue to hold up for the foreseeable future.
Since switching our site search to Google Custom Search we have reduced search refinements by 50%. (That is users who search and then refine their search by searching again). This has reduced the bounce rate (users whom left the site after searching) and also extended the time on site post search.
Also I am sure that there are SEO benefits of using Google Custom Search on your site. Having Google constantly refreshing your content and indexing can’t hurt and I am sure by plugging in another set of data to Google.
The biggest benefit though is still to your end users who will be able to find what they are looking for on your site easier, faster and simpler.