[An Updated List 21st Aug 09]
Help me Compile a List of all the Advantages & Disadvantages of Building an Application on the Google App Engine
Pros:
Cons:
Known Issues!! : http://code.google.com/p/googleappengine/issues/list
Hard limits
Apps per developer - 10
Time per request - 30 sec
Files per app - 3,000
HTTP response size - 10 MB
Datastore item size - 1 MB
Application code size - 150 MB
Update Blob store now allows storage of files up to 50MB
Pro or Con?
App Engine's infrastructure removes many of the system administration and development challenges of building applications to scale to millions of hits. Google handles deploying code to a cluster, monitoring, failover, and launching application instances as necessary.
While other services let users install and configure nearly any *NIX compatible software, App Engine requires developers to use Python or Java as the programming language and a limited set of APIs. Current APIs allow storing and retrieving data from a BigTable non-relational database; making HTTP requests; sending e-mail; manipulating images; and caching. Most existing Web applications can't run on App Engine without modification, because they require a relational database.
Pros:
Cons:
I would say its not meant for serious businesses and expensive in long run.