Mary Ellen Bates raves about Carrot2 in her latest InfoTip newsletter. Carrot2 clusters search results, much as Clusty.com does. Carrot2 differs in that it's using a Swiss meta search engine, etools.ch, as the basis for its initial group of search results, while Clusty uses US-based meta search engines.
Both the Carrot2 and Clusty home pages look like mirror images of each other, down to the various selection tabs on offer. As a test, I entered "information retrieval" as a search term in both. I didn't do a hard analysis, of course, but I found Clusty's clusters generally more scannable and valuable as a starting point for further searches, as the clusters tended to be more granular. Carrot2's fewer clusters seemed to survey the landscape at a slightly higher level; specifying different sorting algorithms (available under Show Options) was fun though--"Rough k-Means" and "HOAG-FI" shook up the clusters and yielded a more interesting display.
By the way, I'm also subscribing to Mary Ellen's Info-Entrepreneur newsletter. I'm able to visualize myself doing that kind of work soon; up to now, I've not had a real picture of where my IS degree may take me. The Info-preneur/Information Broker idea at least gives me a start at something to form ideas around. I also consider it a good omen that her initials (MEB) are the same as mine. :)
Mary Ellen also runs a blog on the side, Librarian of Fortune, where she "contributes white noise to the blogosphere." Highly recommended, as are her newsletters.