Well it's about time!   After they started hosting source code and projects, I expected to see it happen.   After Krugle came on the scene and did an awesome job of source code search, I expected to see it happen.   I guess it just seems like a no-brainer for company like Google.   They certainly took their time, but the work looks good so far.

They have advanced options to enter search criteria as a regular expression, choice of language, license, packages, filename matching, and case-sensitivity.   It works pretty well.   I don't think that the results are on par with Krugle yet, and the UI definitely is class simplistic Google (read: plain).   It's a start though.   I'll need to keep checking up on it.   It can only get better!

Here's the link: Google Code Search