I'm having the same problem here.
On a real iMac G3 with 9.2.2 and a working internet connection. My 9.2.2 came from the universal image from here.
I replaced the Sherlock 2 application, deleted the Sherlock preferences folder and the two files in System / internet search sites / My channel.
The list never gets populated. I downloaded the plugin list to put it in there manually. When I double click on a plugin, it says that the document "couldn't be opened because the application Sherlock 2 could not be found".
When I try searching with Sherlock 2 and all plugins checked, it searches for a while but the progress bar never progresses, and then it tells me that a "network error occurred, the server did not respond to my search request."