The Smart Address bar performance in the Internet Explorer 8 (download) has got several under the hood changes with the net result of improved performance by 50% on average, and over 98% in some scenarios. Most of these changes don’t affect the actual behavior of the address bar, but first, when you type a single character into the address bar, you will now see only typed addresses. Second, when you type two or more characters, we look for results from typed addresses and other local data (history and favorites by default) just like we did before. The difference is that you may see typed addresses first, followed shortly by the other results.

Full Article: IE Blog