Considering the ludicrous wagers Watson made on Jeopardy for the Daily Doubles (and the fact that it considered Toronto a US city), I'm not too worried. Basically Watson won on a brute-force approach with reaction times humans can't match.

Unless it's been added since, Watson received the clues as text, not by actually listening to them audibly, so I'm also curious about how dealing with actual spoken words (especially from non-native English speakers) or badly formed sentences typed on a keyboard would affect its abilities.

Still and all, there are quite a few uses for this thing. It would certainly move search engines way beyond just matching words or phrases and is already making an impact in the health care field.