Perhaps this was a feature of iTunes3 in general and I didn't notice it. I've noticed in iTunes 3.01 that when you search, a little X appears to the right of your search query. When you press the "X", iTunes clears the search input. Hopefully I am not in error and this is a 3.0.1 feature, but perhaps not.
[Editor's note: I think it's new in 3.01, as I remember having to wipe the text with the delete key to clear previous searches ... but maybe my memories are wrong as well. Anyone still running 3.0?]
Mac OS X Hints
http://hints.macworld.com/article.php?story=2002092305514031