Yeah, I really like the image search too! I like having such an expansive selection of results in easy-to-see thumbnails. Also, I think Google really got rid of a lot of the clutter involved in the original image search UI. Not to mention, they've improved the results for the pictures you get to deliver even more relevant image results!
As for Google Instant and "I'm Feeling Lucky..." I see why they're both still around. If you go into it with an idea of what you're searching for already in mind, then the "Instant" won't really "change" your search or make it automatic in any way. Google Instant works much the same as Google Suggest did, and really, who paid attention to that? :P The only difference is now the "Suggestions" are visual rather than just a drop-down text menu.
And "I'm Feeling Lucky" is still fun, because it cuts through all the "suggestions" entirely and drops you off on the page Google assumes you are looking for... which has never been super useful I've found, but has always been super fun!
But yes, I totally agree with you about the image search. So much better!