>I have found that this happens if the cursor is above the region. So, if the region is collapse, if I do a search when the cursor is above it, it will expand it by default.

You may try asking it here http://social.msdn.microsoft.com/Forums/en/vseditor/thread/9b5f0739-16ba-48ea-a8ff-c82f888e4c5f

Just in case I tried googling the question, but that's the best I came up with.