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 Google Instant went live on 9/9, read industry experts opinions on how this will affect SEO here, including contributions from White Hat SEO Marketing.  

algorithm - Whitehat SEO Marketing - Glossary

White Hat SEO Glossary Index

In its commonly used Seo context, an algorithm is basically what a search engines use to determine the relevance of the information in the index to what the user is searching for. The simplest search engine algorithms scan for the frequency and location of keywords on a Web page. Those with higher frequency are typically considered more relevant. This type of search engine was wide open to abuse because search engine result placement can confer revenues to the site owner. Search engines therefore are always increasing the sophistication of their algorithm. The word is often abbreviated as algo in search engine discussion forums.