The default Django version in GAE (Google Apps Engine) is actually v0.96. It willl change in an GAE release in the near future. The use_library() command allows to explicitly select a Django version. More informations are available at the GAE development website.
Google App Engine lets you run your web applications on Google’s infrastructure. App Engine applications are easy to build, easy to maintain, and easy to scale as your traffic and data storage needs grow. You can serve your app from your own domain name or from a free name on the appspot.com domain.
App Engine costs nothing to get started. All applications can use up to 500 MB of storage and enough CPU and bandwidth to support an efficient app serving around 5 million page views a month, absolutely free. When you need more resources and enable billing for your application, your free limits are raised, and you only pay for resources you use above the free levels. There are no set-up costs and no recurring fees. The resources your application uses, such as storage and bandwidth, are measured by the gigabyte, and billed at competitive rates. You control the maximum amounts of resources your app can consume, so it always stays within your budget.
The Java runtime environment uses Java 6, the App Engine Java SDK supports developing apps using either Java 5 or 6. The Python runtime environment uses Python version 2.5.2. Additional support for Python 3 is being considered for a future release. App Engine provides a powerful distributed data storage service that features a query engine and transactions. Just as the distributed web server grows with your traffic, the distributed datastore grows with your data. You can register up to 10 applications per developer account.