I appear to have resolved the problem after doing a "Repair" installation.
All right, now it's like someone's toying with me. It now finds shapefiles, but not features within geodatabases and feature datasets (and this is what I want it to do). I've not changed any settings. I'll edit my original post to reflect this development.
For example, if I look for the term "*shp*", it should find all kinds of Shapefiles. However, all it ever seems to find are .xml or .txt files with "shp" in the path or file name. Very annoying. What's going on?
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