That could be one use case, but since no clients do that I doubt it's a very useful one for a while. :) I'm mostly thinking about using virtual mailboxes for custom webmails, at least initially.
;-).. I find it to be a problem that you're the one who decides what it's useful for and what it's not :-P.
Is it possible to ask Dovecot via IMAP to look for other things in the virtual folder, for example all items with the flag "huey lewis" applied?
Yes (other than spaces not being allowed in flags). It's built using a fully functional IMAP SEARCH query.
Is this sort of query fast / indexed?
Current implementation is a bit slow, but in future it will be fast.
So at what point will it be possible to have Dovecot index whatever the client asks it to index? :-)