What language (Java or Python) + framework for mid sized web project?
It depends on your personality. There's no right answer to this question any more than there's a right answer to "what kind of car should I drive?"
If you're artistic and believe code should be beautiful, use Rails.
If you're a real hacker type, I think you'll find a full-stack framework such as Rails or Django to be unsatisfying. These frameworks are "opinionated" software, which means you have to really embrace the author's vision to be most productive.
The wonderful thing about web development in the Python world is there's several great minimal frameworks. I've used several, including web.py, GAE's webapp, and cherrypy. These frameworks are like "here's a request, give me a string to serve up." It's raw. Don't think you'll be stuck in Python concatenating strings though, God no. There's also several excellent templating libraries for Python. I can personally recommend Cheetah but Mako also looks good.
I plan to start a mid sized web project, what language + framework would you recommend?
I know Java and Python. I am looking for something simple.
Is App Engine a good option? I like the overall simplicity and free hosting, but I am worried about the datastore (how difficult is it to make it similarly fast as a standard SQL solution? + I need fulltext search + I need to filter objects by several parameters).
What about Java with Stripes? Should I use another framework in addition to Stripes (e.g. for database).
UPDATE:
Thanks for the advice, I finally decided to use Django with Eclipse/PyDev as an IDE.
Python/Django is simple and elegant, it's widely used and there is a great documentation. A small disadvantage is that perhaps I'll have to buy a VPS, but it shouldn't be very hard to port the project to App Engine, which is free to some extent.