Java leads the way to Ruby
As of early April, Google's App Engine supports Java. The really good news here, if you don't care for low-productivity languages, is that the Java 6 VM provided by the App Engine has near-native performance, and most high-level languages have interpreters written in Java.
This opens the route to my favorite language, Ruby, being available on Google's App Engine. appengine-jruby is an experimental open-source project aimed at making Jruby available for the App Engine, and at implementing Ruby-esque abstractions over Google's APIs. At the same time, Ola Bini from ThoughtWorks took the time to get Rails to run on the App Engine, and wrote a blog post documenting his method.
There is still a devil in the details, however. According to Ola Bini, performance is nothing to write home about, and developers still have to zip up their source code to work around App Engine's 1,000 file limit.
Why this matters
I think Google's App Engine is an important cloud-hosting platform because of its generous free tier. It is the best solution that I know for hosting hobby projects, or for a project's incubating phase
Sooner or later, Rails applications will run seamlessly on Google's App Engine. I believe it will happen sooner rather than later. Once Rails 3 shows up in the horizon and delivers on its promise of modularity, developers will be in a good position to rewrite the right parts for the App Engine.
I hope that you have found this post useful, and look forward to your comments.