On my Mk2 V2b7 there is no search option on the unit itself, only the remote. How come?

Because there aren't any "letter keys" on the front panel to do the search with.

When a later version of the software comes out, you'll get the Soup views from the main menu, which will do the same thing you're talking about and let you scroll with the knob instead of picking letters. But it will take quite a while to find a specific song. You're still better off using the remote to do the searches.