"We've heard you loud and clear, and contact search now works much better: instead of just searching contact names and email addresses, it now includes phone numbers, notes fields, and mailing addresses as well. So, if you're visiting the Bay Area and looking for friends to catch up with, you could try typing "650" or "415" in the contact manager search box," suggests Gmail's blog.
Gmail should also include an advanced search option for contacts, so you can find more precisely the contacts that work for a certain company or the people who sent you more than 3 messages in the past month. Some of these searches could be saved and used to create dynamic groups.
You are right that earlier one of the most significant limitation of Google's contact manager was that most of the contact fields weren't searchable. This problem has been addressed and you can now search for any information included, from titles and companies, to locations and phone numbers which helped a lot to search through data.
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