What I should install to develop Python Google App Engine apps?

You'll certainly need:

• Google App Engine Python SDK
• Python 2.5.4
• Eclipse IDE for JavaScript developers
• PyDev http://pydev.org/updates

You'll probably need:

• Python Imaging Library (PIL) 1.1.7 for Python 2.5 
• Mercurial Eclipse (HGE) http://cbes.javaforge.com/update

You can install either 32 or 64 bit versions of Python. But PIL installer will have trouble to find Python 64 bit. It needs a Windows Registry manual update to enable the installation.