Google App Engine provides an opportunity to leverage Googles infrastructure for server side web applications. The platform is built on a Python runtime, includes persistent storage as well as the capability to integrate with existing Google applications (think Google Maps, Gmail).
The App Engine SDK includes a web-server application that provides a means to emulate the App Engine services from within a local development environment. Once deployed, applications can be hosted on the appspot.com domain, or your own domain.
The video below is a good introduction to Google App Engine from a recent CampFire One event:
One of the more intriguing aspects to services like the Google App Engine is that you focus on the application, not the hosting/scaling. Should you build a killer app, your focus still lies on the application itself, not on how to massively scale (which would be a good problem to have). From the App Engine homepage
This is a PREVIEW RELEASE of Google App Engine. For now, account registrations are limited to the first 10,000 developers, and applications are restricted to the free account limits.
Hurry and give it a go