Google AppEngine is an application platform that allows developers to build and host web applications in the cloud. It provides automatic scaling of web and worker instances, high availability, load balancing, and simple deployment. The platform handles low-level tasks like hardware provisioning and maintenance. However, applications are limited by the sandbox environment and certain features like file system access and sockets are not supported. Pricing is based on usage of resources like bandwidth, CPU time, and data storage. While deployment is easy, applications need to be designed specifically for the AppEngine platform to work within its constraints.