iPhone app with Google App Engine
That's a pretty generic question :)
Short answer: yes.  It's going to involve some rethinking of your data model, but yes, changes are you can support it with the GAE Datastore API.
When you create your Python models (think of these as tables), you can certainly define references to other models (so now we have a foreign key).  When you select this model, you'll get back the referencing models (pretty much like a join).
It'll most likely work, but it's not a drop in replacement for a mySQL server.
I've prototyped an iPhone app that uses (internally) SQLite as its data base.  The intent was to ultimately have it communicate with a server via PHP, which would use MySQL as the back-end database.  
I just discovered Google App Engine, however, but know very little about it.  I think it'd be nice to use the Python interface to write to the data store - but I know very little about GQL's capability.  I've basically written all the working database code using MySQL, testing internally on the iPhone with SQLite.  Will GQL offer the same functionality that SQL can?  I read on the site that it doesn't support join queries.  Also is it truly relational?  
Basically I guess my question is can an app that typically uses SQL backend work just as well with Google's App Engine, with GQL?
I hope that's clear... any guidance is great.