np Zath.
In that case i don't know of any other solution than to use findfirst/findnext yourself and 'update' your label inside the loop. afaik there is no other (automatic) recursive filesearch that allows you to provide (visual) feedback.
The reason you're not able to update a counter or label is because the filesearch function doesn't give any feedback when it's running. You start it and when it ends it returns something useful -> this behavior is by design.
Hence why i mentioned enumdirs, as that does practically the same thing but allows the use of a callback routine.
You'll probably be able to find many other recursive filesearch-a-like solutions using findfirst/findnext (usually also encapsulated inside some sort of 'filesearch' function), that are made by others.
Alternatively you could copy-paste the source of the filesearch-function, program a counter inside it (storing it globally or directly in your form) so that you could perhaps run the routine asynchronously (or add processmessages inside the loop) and use the counter to give feedback to the user.
Only wanting to let you know that the standard/default filesearch function is not going to help you out there.
edit:
it just occurred to me that maybe you could do something with the notify events
of the stringlist used to store the results of the filesearch function.
edit2:
i just noticed
TFilesearcher inside fileutils.