Here's a sketch of how it could (and I think it should) work by default (compare with the previous "too large list" screenshot):

 *) sections:
       - Section markers can't be "selected" (only action-lines can be), but the one containing the currently selected action is "active". Up-down skips the section markers.
       - The currently inactive sections have shortcuts to be reached quickly.
       - the active section shows useful keys: up/down, space for a short section, left/right, space for a large section. Up/down work for large selections too, of course, but left/right is a bit more important (it changes the page). 
       - space toggles the current section between normal (at-most-three entries), expanded (see last panel) and compacted. When one selection is expanded this way, the others are compacted. I think "expanded" status should be forgotten between uses, but compacted should be remembered (as it is now).
      - the active section should be visibly marked as "selected" by color (it was too hard to draw, I show this as a bar of color). This should be less striking than the color used to highlight the current action (black in my sketch, it could just be darker).
      - sections with more than 4 entries are paged by each 3 elements (unless there are no other sections for a particular search)
      - sections with few entries (which are not paged) don't display the number on the right.

  *) Actions:
       - sections are paged/compacted so that no more than a dozen actions are shown
       - users can add a short-cut for important actions -- Alt-G for google in this case.
       - All other visible actions are given a number from 1 to 0 as a shortcut. Pressing Alt+4 in the first panel would open album.py
           - Except: the currently selected action has Enter shown. The numbers are "recycled" when the selection is moved with up/down. (see last panel)
           - Also, actions with shortcuts are skipped.
      - Since no more than 10-12 actions are shown, we shouldn't run out of numbers.

The left panel is what should be shown after just typing "picard". Note:
 - the redundant "execute picard" is hidden from the actions
 - the most likely choice (Launch picard) is selected. It shows "Enter" to the left, meaning that Enter will execute that option.
 - pressing Alt+1-9 or Alt-G would execute the respective action.
 - pressing down would select "search for picard using beagle"
    - launch picard will show (alt+)1 as a shortcut, because enter now starts the search

Pressing Alt+F moves to the middle panel:
 - the files section is active
     - since it has many results, it's paged into "threes". If the 'web' section wouldn't be there, it could be paged into sixes.
     - because it's now active, it shows useful key-strokes
     - because it's paged, left-right can cycle between pages; space would move to the right-most panel
     - because it's no longer active, the "Actions" section shows a short-cut instead of actions.
 - the "Open [folder] picarded" action is the first in the active section, so it's selected
     - it gets the "enter" shortcut, and the numbers are redistributed.
     - down would move to "open album.py"
     - up would move the selection to "Search for picard using Beagle", and the Actions section would become active.

Pressing "space" expands the current section if it's paged. This moves to the rightmost panel (but the list of files shouldn't change, neither the selection):
  - all inactive sections are colapsed
       - pressing their shortcut would de-expand and de-activate the files section.
       - even short sections show the number of actions in this state
  - the active section expands to fill all 10 action-slots available
       - pressing space again would reverse the expansion
            - any sections 'colapsed' before the expansion remain colapsed
       - if it has more than 10 entries, it is still paged with left/right