SharePoint Tutorial - SharePoint Services Search
SharePoint Services 3.0 search uses the same searching technology as SharePoint Server 2007 (MOSS). Previous versions of SharePoint services relied on SQL fulltext search.
SharePoint Services search indexes one site collection at a time and confines the search to the same site collection.
For example lets say you have two site collections, site collection 1 and site collection 2. If you perform a search within site collection 1 you will only get results from data and documents stored in site collection 1.
Microsoft now provides Microsoft Search Server 2008 Express which can index multiple SharePoint site collections, web sites and other systems providing an enterprise search solution for free.