Umm, Swizzec is incorrect. Easy enough to test:
rpc = []
for in range(1,20):
rpc.append(urlfetch.createrpc())
urlfetch.make_fetch_call(rpc[-1],"http://stackoverflow.com/questions/3639855/what-happens-if-i-call-more-than-10-asynchronous-url-fetch")
for r in rpc:
response = r.get_result().status_code
This does not return any exceptions. In fact, this works just fine! Note that your results may vary for non-billable applications.
What Swizec is reporting is a different problem, related to maximum simultaneous connections INTO your application. For billable apps there is no practical limit here btw, it just scales out (subject to the 1000ms rule).
GAE has no way of knowing that your request handler will issue a blocking URL fetch, so the connection 500's he is seeing are not related to what his app is actually doing (that's an oversimplification btw, if your average request response time is > 1000ms your likelyhood of 500's increases).