This release solves almost all problems we had with App Engine. Users now don't have to wait for an instance to start, so the site will always be fast. Also, DeadlineExceededError now can't lead to mysteriously broken instances, anymore (thanks Guido!). And with the Channel API we can build real-time collaborative apps.
Now we only need SSL support and here we come, blasting everyone away who wastes time on maintaining his own servers. :P Well, at least until the next feature is needed, but not available, so let's hope this won't be the case. ;)
Also, DeadlineExceededError now can't lead to mysteriously broken instances
Note that the increase in the deadline to 10 minutes only affects background tasks (ie, the Task Queue and Cron jobs). It's important, but won't fix those DeadlineExceededError on a user-facing page errors on it's own.
What the parent is referring to is that when a Python process gets the DeadlineExceededError, it will now be recycled. Previously it would be re-used, and this would break things if the error happened in the middle of a module import (because the module would not be re-imported). Django was especially vulnerable to this.
Now we only need SSL support and here we come, blasting everyone away who wastes time on maintaining his own servers. :P Well, at least until the next feature is needed, but not available, so let's hope this won't be the case. ;)