How are they dealing with Google AppEngine's support for 2.5 when Django reaches 1.4? Or is AppEngine also expected to upgrade to 2.6 (or higher) anytime soon?
They still maintain the old versions too. Last security update featured new point releases of 1.1, 1.2, and 1.3 beta. So you can just use the old version until Google get their act together.
Technically, Django doesn't run on GAE. All the options to get it running on GAE involve quite a bit of hacking of Django. So there really isn't any support to maintain.