<p>I always wondered what different methods Google Desktop Search is using so that it uses least CPU and memory while indexing a computer containing more 100,000 files on an average.</p>

<p>In just few hours it has indexed the whole system and I did not see it eating up my CPU, memory etc.</p>

<p>If any of you have done some research, please do share.</p>

It doesn't...
I installed it on one computer, and quickly removed it because it was intrusive (although this can be probably configured) and hungry (particularly on a low end PC).
It is installed on a laptop near me right now, and if I compare it to a couple of small utilities I run permanently (SlickRun, CLCL, my AutoHotkey script...) it uses more than 10 times their CPU and 5 to 20 times their memory. Times two, since, for some reason, I have one instance running another, plus the ToolbarNotifier (less hungry).
Even Trend Micro anti-virus uses less memory and CPU.
Perhaps I will try it again when I will get a more modern PC with lot of memory, but right now I am happy enough with some grep utilities, even if they are slower.