XO made the switch to GAE in may 2011. Since then we have not looked back, because the 0 sys admin draw of GAE saved us a lot of time as we iterated a million times on what our server system requirements are. However, now that our product vision has matured and solidified we are looking beneath the surface. Once you zoom in the details you start realizing that GAE is not a silver bullet solution for all of your worries, in fact its a pretty limited system that does certain things well and other things poorly. So just like LAMP stacks, you got learn the ins and outs and play the game by the rules alotted.
Today Adam fwd'd a great article that delves into the shortcomings of GAE. Check it out, its one of the best ive found:
The simlified down take away was that GAE is great at reads and not so good for writes. e.g. An app that has 100 : 1 reads : writes ratio "should" do really well. Read the linked post to get other relevant details.