Manas Tungare (worked on the Google Instant prototype):

We also minimize the amount of flickering on screen when results change. Given the realities of network latency in shipping a new set of results from the server to the client, we have a lot of black magic going on in the interface that attempts to minimize the visual noise when results transition. For example, when new results are available, the old ones fade out quickly through a transition to grey; this was noted as a strong indicator by our users that “Google is thinking”; without it, users didn’t realize that results were different, unless there was a huge map or a huge picture in the middle of the new results page.