Looks like Google is feeling the pressure to keep up w/ Amazon's hosted MySQL service (http://aws.amazon.com/rds/). And they aren't fooling around considering the announcement was made by Wesley Chun (didn't realize he was a Googler, but he's the author of the excellent "Core Python" books) and Guido himself. Hurrah for competition!
This was announced at Google I/O. But it's only for AppEngine for Business at the moment.
Talking to some Google people they didn't rule out making available for standard AppEngine.
One interesting thing about it is that it's built on a custom BigTable backend (or at least Google has a custom BigTable backend - it's my assumption that it's being used for this)
I wish they provided an option for the datastore to be even less of an RDBMS, but much faster. I suspect a lot of the current write latency is due to the transactional guarantees they provide. Just give us access to the raw bigtable, please! :)
