I've been following the latest developments with server-side JavaScript - especially Node.js - and wondering if there is any possibility of using such an approach to develop a Google App Engine web application - either separately from or in combination with Python or Java?
node.js uses an event-loop model which is not really a good fit with the current App Engine design.
However, there are several projects that bring JavaScript to App Engine. Check out App Engine issue 35 to read about some of the solutions. The highlights are: Rhino, Rhino For Webapps, if you like Python check out AppengineJS. I have also heard that RingoJS might be worth looking into.