According to SDK documentation, its possible to send e-mail from your local, test application. Unfortunately there's a problem if you change mail parameters. Aral Balkan recommends small local SMTP server written in Python. I - by now - decided to restart dev_appserver.py every time I change something.
If anybody starts with App Engine or Django, please leave a comment, and tell me what is your preferred tutorial and how do you test you Python applications.