Personally, I have found Python to be more fun. That's just me. However there are several commited Java developers out there that will appreciate the Java support in GAE. Furthermore, supporting Java was a good choice by Google since it will allow the GAE platform to potentially host many other languages. It's obviously a little early to expect all JVM based languages to run on GAE, but the future looks promising. For now we can look at what is and isn't working by taking a look at this GAE Java Group Page.
Coming back to Python, I think small web applications will work great with the built-in webapp framework. Other applications will benefit more from Django 1.0. Have a look at the GAE articles under the frameworks section for a few good reads on this. In any case, you will undoubtedly have restrictions in any of your choices since most web frameworks are designed with relational databases in mind ... which datastore/bigtable is not. Furthermore, the GAE platform has to be sandboxed for security reasons which also restrict you to some extent. Hope this helps.