From the article: "Additionally, the Python SDK has a new experimental feature that gives you the option to use SQLite as the datastore stub backend." The stub backend is where the development server stores the Google datastore information. That is very different from Google saying they will provide a SQL interface.
The one feature that I wish would be added to both Java and Python versions of the SDK is a very easy way to migrate app data stores between AppEngine and a local development environment. For Java, I find myself writing bits of custom code to load data from a JAR file to load up my hosted data store - I do this one time, then delete the code and JAR, and re-upload the app. A nuisance.
Can someone edit the title? It includes SQLite for development to speed stuff up, but there's no SQLite for your actual deployed app.