So despite the vociferous defense app engine received here about a month ago after some criticism it looks like no YC companies actually use it?
Wattvision is hosted on App Engine.
You can't point an A record at App Engine.
I'd guess that the reason people aren't using AppEngine is more that it's strategically a pretty bad idea. You can't move off it, and its constraints have a major effect on how you design and architect your application. When you're still figuring out what your product is, using a platform that requires you to design your data storage to fit the queries you are going to run isn't necessarily that smart.