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Python 2.7 is GA for App Engine now! A few notes:

- The Python 2.7 runtime only supports 32-bit mode
- There are situations where some apps will experienced increased CPU latency - you'll want to increase your frontend instance class and enabled threadsafe mode - you should see much better throughput than single threaded Python 2.7

If you're looking at upgrading your Python code for your App Engine app to take advantage of 2.7, this might also be a good time to check out ndb, a project that may (hopefully) become the standard datastore API for GAE:
The official Google App Engine blog. The latest news on Google App Engine and the App Engine community.
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