Pros:
You don't need your own servers.
You don't need system admins.
You don't need database admins.
You don't worry about replication and backups.
Many useful built-in services (Users, Blobstore, etc.)
Appengine is free until your traffic picks up.
Seamless (almost) deployment of new versions.

Cons: None.

Some people believe that Appengine has certain shortcomings. Some services 
can be a bit pricey. None of this matters to you. If your startup becomes a 
huge success, you can always look at your Appengine bill and optimize parts 
of your service, or move some services (e.g. email, file storage) to other 
platforms. Appengine is the ideal platform for startups.

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