I have heard the Google App Engine[java] do not support JDBC and Hibernate. Is it true?
If yes then how do we access the database in Google App Engine.
Also, is there any [basic] sample application which can help me understand how to perform CRUD operations in GAE.
JDBC and Hibernate are not supported: http://groups.google.com/group/google-appengine-java/web/will-it-play-in-app-engine
I'm currently learning app engine too. Here's some resources and projects that have been helpful:
http://code.google.com/appengine/docs/java/overview.html
http://groups.google.com/group/google-appengine-java
Springsource Tool Suite is shipped with the Google Plugin for Eclipse (GPE): http://www.springsource.com/products/sts
A non-trivial web app example (spring mvc/gwt/jsf + JDO + spring IOC, service layer, DAOs, DTOs, test suite): http://code.google.com/p/swagswap/
Google uses their own type of Datastore for GAE apps. Here is there documentation for how it works: http://code.google.com/appengine/docs/java/datastore/overview.html. That page has examples of how it works.
Storing data in a scalable web application can be tricky.
You have to use their datastore API. http://code.google.com/appengine/docs/java/gettingstarted/usingdatastore.html
AppEngine doesn't use a relational database. You should really read the docs about how AppEngine works, starting with this Java-oriented overview of AppEngine.
AppEngine delivers on its scalability promise by leveraging Google-style infrastructure. If you're looking to use a more traditional stack, you'll probably be better off with Amazon EC2.
Yes, that's true. JDBC drivers won't work there, as long as GAE datastore is not based on RDBMS (it's rather some kind of NoSQL big-table storage).
If you want to work with GAE storage via ActiveRecord ORM (Hibernate-like), you may be interested in JPA or JDO - the both are supported. Alternatively, you can directly use low-level API.
For more information you may refer to Datastore Java API Overview.