Yes, Yes, yes. I have implemented two small websites on GAE. It's fabulous. It has some scaling issues, but it scales up high enough for proof of concepts and minimum viable products. It is cheap, and easy to use. No futzing around with a server, ever. No DB installation or maintenance issues. Just write and run.

I have a related question: I am interested in getting started, and am currently heavily leaning towards GAE + Django. Friends say everything is swell, I like using Python, etc. Any reason NOT to invest more time in this? (Without, er, necessarily instigating a RoR debate).