Product Search User Interface Demo

Working with limited space and needing both a basic and advanced search I came up with this design. The search happens automatically much like Google instant search as you type. What I like about the design:

What I am worried about: This is just a simple demonstration of what I have come up with and would love your feedback. What do you like about it? What do you hate? How would you do it differently? Let me know in the comments or on Twitter @MikeGrace