Regardless of ndots option in /etc/resolv.conf, when NXDOMAIN is returned from the DNS server then resolver always try another attempt with the original name extended by what is in search option.
For example, if you're looking for very.long.url.nowhere and there is a line "search ubuntu.com" in resolv.conf you will get addres of server very.long.url.nowhere.ubuntu.com if such exists. It is incorrect, it should occurs only for urls having less that ndots option dots in its name.
Experienced on Kubuntu 9.04 with linux-image-2.6.28-13-generic kernel package.
DistroRelease: Ubuntu 9.04
Package: resolvconf None [modified: /var/lib/dpkg/info/resolvconf.list]
Uname: Linux 2.6.28-13-generic i686
UnreportableReason: This is not a genuine Ubuntu package