Python 2.6 + PIL + Google App Engine issue
You cannot use PIL with Appengine; it uses C extensions and won't run in the sandbox environment.  You do need to have PIL installed on your local machine to use the images API in dev_appserver, because the SDK version of the images API itself uses PIL, but this doesn't mean you can use all of PIL through the images API; the images API is fairly limited.
Additionally, it's a good idea to use Python 2.5 for development, as the production environment uses version 2.5.2 and not all Python 2.6 syntax will work in production (notably "except FooError as bar"), and the purpose of the development server is to test that your code will work right in production.
I am using OS X 1.6 snow leopard and I successfully got PIL installed. I am able to open terminal and type import Image without any errors.
However, When using app engine I get Image error still saying that PIL is not installed. I am wondering if any of you have an thoughts as to how I can resolve this issue.
-Matthew