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Most people missed it, but not Dave Winer:
What you're going to see here that you've never seen before is shrinkwrap net apps that scale that can be deployed by civillians.
Exactly. I would gloat that I said it earlier, but he dreamed it in advance:
The next step after that will be packaged applications that deploy through Amazon that you can buy for shrinkwrap prices.
Speaking of predictions: one of the Google example apps was HuddleChat, written in a couple of days by 3 people and bearing uncanny resemblance to 37Signals' paid product Campfire. Bruhaha ensued, the app went offline, 37Signals is "disappointed with Google".
Like I wrote yesterday, they (and a host of other companies betting their business on providing hosted, specialized app for a fee) will be even more disappointed when apps written to Google's App Engine copying functionality of those hosted applications will become available (either for a one-time fee or open-sourced and free) and deploying such apps on GAE will be no harder than signing up for the service.
It's all technically possible. It's not going to be too hard for Google to build a packaging system and a catalogue of applications and provide one-click deployment of any GAE app.