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Make it work - with a single window - on pc, that can access all your notes, unified into a single interface. Just having this portable isn't useful, but emulate dropbox: have it EVERYWHERE, web/desktop/mobile etc.
So the main difference between this and the Evernote app is the speed search that updates results realtime? I realize this is an MVP and please pardon my ignorance but why would I use this instead of Evernote (This is not a troll attempt, I'm not an avid user of evernote yet but have been using it more and more recently)?
The main difference is that interface, and that it acts on a folder of simple text files rather than its own database format. I personally choose to use it because I prefer my notes to be text files so I can easily edit them with Notational Velocity on my mac, and emacs on any machine I have Dropbox connected to. It may be that the many features of Evernote are better for you - I personally used a variety of note-taking apps and just kept coming back to NV, so I wrote a companion for my phone.
I just bought this and really like the Notational Velocity concept. I need an iPhone note taking app with offline support so this falls down in that area at the moment. If you added offline support and TextExpander support this could easily be my most used notes app.
Offline support is definitely feature #1 in the roadmap right now. I just wanted to get a 1.0 out the door to see if the app met a need before I spent a lot of time on the details, plus iOS 5's uncertain treatment of app temporary directories made my initial approach less simple than I had hoped.
That's not to say I didn't sweat any of the details! But I think news.yc gets that 1.0 == MVP
I'm looking for an iPhone extension to Notational Velocity.

Does this create .txt files? Can I set which folder it saves to so it shares with notational?

I wrote this because I had the exact same need. When you connect it to Dropbox, you can choose any of the folders there, and if there are already .txt files in that folder, they will be listed.
and yes, it creates plain text files.
Ok perfect, bought a copy. Initial feedback:

Works well. I expect to use it day-to-day.

I'm a designer so here is my nitpicking

- Can there be an option for a black background with white text like notational?

- most important: the red background looks out of place. Red is the most eye catching color. I feel like the search bar should be a more understated color (see Reedr) and the notes most prominent

- on the list of notes, the titles should be a bit larger and centered. Maybe it looks odd because none of my notes are long enough to be double lined

- "Search title or create new" text is too small and hard to read

Can you add a web editing interface too? The thing about notes is that they need to be everywhere, not just on mobile and your desktop.

I'll definitely try this out though!

I haven't added a web interface yet - though if enough people like the concept enough to use the app and many of them want a web interface, I would happily add it to the roadmap.
I love apps that do one thing alone, and do it well. A couple tips though:

- keep the main app colors to 2-3 maximum. You currently have a rainbow there: red header, blue row selection background, gray app background, white buttons

- as ivankirigin said, a web interface would help too. Keep it simple

edit: formatting

thanks for the feedback, points duly noted.