Building Scalable Web Applications with Google App Engine [video + slides]
sites.google.com
sites.google.com
Background tasks and queues are still on the roadmap, the open-source Jaiku port hasn't been released, and most importantly you can't pay for quota yet!
For those folks, you can recommend S3 and tell them "This will cost you essentially nothing, it will fix your problem, and integration into your existing site will take ten minutes if you type slowly."
What is the migration path from a successful business to the App Engine?
Step 1: Learn to write Python.
Step 2: Forget everything you've ever learned about databases.
Step 3: Get a cup of coffee. You're not anywhere close to done.
I agree with both of you - it is both the flexibility of EC2 and inflexibility of App Engine that makes a difference.
Seriously, they probably spend all that time making it more robust, so I appreciate them taking time to get it right. But I'm not going to put any serious stuff in there until usage caps are lifted.