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Is there any way to run background processes in the Java version of GAE?

Yes. http://code.google.com/appengine/docs/java/config/cron.html

"A URL invoked by cron is subject to the same limits and quotas as a normal HTTP request, including the request time limit."

The request time limit is 30 seconds. Yes, that means that you have to break your background processing in to 30 second chunks.

The GAE team is promising better support for background processing "soon".

I find that despite this limitation, there are clever/elegant ways to work around it. In general, look to increase the frequency of a job while decreasing the amount of "work" done per cycle.

No, there is no threading. A thread starts in response to an HTTP GET or POST, returning the result, then dieing.

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