Overall, Google Apps looks like a very nice piece of infrastructure for building Web applications. The database integration with Big Table and Google's authentication platform add some good tools for quickly building applications.
We got into a pretty large discussion of the pros and cons of Google Apps, Amazon Web services, dedicated hosting, and so on. None of these services are directly competitive. They're complimentary in many respects. You could imagine many applications that would make use of all of them.
Speaking of Sam's application: a few days ago, I mentioned to Sam, Bryant and Devlin, that I liked putting things on lists because then I could get them out of my mind and if I lost the list, I never had to do them. A guilt-free way of not getting things done. The problem with online todo lists is they don't forget. I hate that! Sam picked up on that for his app and created a task list for people consumed with the guilt of unfinished tasks: Not Getting Things Done. Just put your tasks on the list and forget about them!