I tired this. Don’t expect much though. It seems to be decent for searching places, art pictures (which means it can search abstract patterns, symbols etc.) and creatures. For everything this else it simply seems to match images’ histograms. Anyway this is not bad and quite useful. The google UI too is cool and supports drag and drop.
Head over to http://www.google.com/insidesearch/searchbyimage.html for a intro.