Google App Engine enables developers to build their web applications on the same scalable systems that power Google applications.
Campfire One: Introducing Google App Engine
Watch through the playlist (6 videos)
…Google App Engine provides an infrastructure for running web apps. By that, I mean that we’re focused, specifically on web applications: making them easy to run, easy to deploy, and easy to scale. App Engine is different than a lot of other things out there: App Engine is not a grid computing solution– we don’t run arbitrary compute jobs. We also don’t give you a raw virtual machine. Instead, we provide a way for you to package up your code, specify how you want it to run in response to requests, and then we run and serve it for you. You don’t reserve resources, or machines, or RAM or a number of CPUs, or anything like that. It’s a fluid system, that runs your code in response to load and demand.
You can also read the transcripts here.
It doesn’t use SQL by the way. The datastore is “a flexible, schema-less object database, or an entity store”. It is based on Bigtable.