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A first level involves performing a keyword search based on character matching. A second level, performed only if the first level yields no results, is a keyword search based on phonetic representations of a search phrase and of the keywords. A third level, performed only if the first and second levels yield no results, is a rough matching search.
Sounds a bit like a description of the way they look up and pull results for their MSN site. For example, when you enter some keywords and it has a 'match' then they just whisk you along to the site :) Or it could be more for the browser bar, etc...but it's interesting to know that last on the list of things to do for their search is present the user with choices.
That reads like typical Microsoft. What fun.