I've been using GAE+GWT for about 6 months now, mostly for small, "do it in a weekend" type projects. I've also used it to host content for my iPhone apps, so that I could update the content (mostly ebooks delivered as PDFs) without going through the awful App Store update process.

It's been great for me. I love how quickly I can bootstrap new ideas, put up a prototype, and then just hand out the URL for to people to try.

A couple of recent apps:

http://create-a-password.appspot.com http://slimpoints.appspot.com http://mealminder.appspot.com

That last one was mostly a proof-of-concept in using Google's account and payment infrastructure. Really handy if you decide that you'll want your customers to pay you some day.

I guess the biggest hurdle is getting used to the Datastore, which is not really intuitive if all you're used to is SQL. Overall, a very positive experience for me.