Google App Engine just announced the free quota will be reduced in 90 days, by 2009-05-25. The detail changes are:
  • CPU Time: 46.3 down to 6.5 hours, about 14% remaining.
  • Bandwidth In/Out: 10.0 GB down to 1.0 GB, 10 % remaining.
It's not all reductions, they also doubled the storage quota from 0.5 GB to 1.0 GB.

If you just signed in the dashboard, you would need to agree new Terms of Service, then you would see the new billing section. The most important change of ToS possibly is 4.4. You may not develop multiple Applications to simulate or act as a single Application or otherwise access the Service in a manner intended to avoid incurring fees.

Even though it cut off much more free quota on CPU Time and Bandwidth. My apps will stay in free quota, they are not hot. :)