Google's App Engine is a new service that allows web application developers to outsource hosting and data storage for their applications by using Google's hardware and software infrastructure.
Google App Engine is not just another web application hosting service. It's a a new stack of fully featured and automatically scalable web application platform. It makes easy to build applications that grow from one user to million of users with out any infrastructure headaches. The App Engine platform is built with Python application servers, BigTable database servers and GFS services. It is very important to note that mighty Google Search Engine is powered by all these services.
The current release App Engine allows developers to use Python server side script language for web development. This is seen as the only limitation of the service for people who does not know to develop application using Python. Google has plans to add more languages in the near future.
The official video of announcing Google App Engine at Campfire One on April 7, 2008