I think App Engine is pretty cool for small projects at this point. There's a lot to be said for never having to worry about hosting. The API also pushes you in the direction of building scalable apps, which is good practice.
- app-engine-patch is a good layer between Django and App Engine, enabling the use of the auth app and more.
- Google have promised an SLA and pricing model by the end of 2008.
- Requests must complete in 10 seconds, sub-requests to web services required to complete in 5 seconds. This forces you to design a fast, lightweight application, off-loading serious processing to other platforms (e.g. a hosted service or an EC2 instance).
- More languages are coming soon! Google won't say which though :-). My money's on Java next.