We rarely go over the free limit -- I think we've stayed under $10-20 for the entire year, while serving up several million pages. Most of this is due to bandwidth overages from our comic: http://www.wolfire.com/comic

The times we are charged tend to be for burst traffic when something gets picked up on Digg or Reddit. Recently, one of our blog posts was featured on Digg, Reddit, Slashdot, etc. at the same time and Google dutifully served up a couple hundred thousand visits over the course of a few days. They charged us about a nickel! Granted everything is nicely cached so we were not doing much heavy processing.

It definitely depends on your web app. If you can cache it, App Engine is essentially free. If you are doing something CPU intensive for every visitor, it's going to be expensive.