A Compute Engine with a view Google Compute Engine is just one part of the Google APIs portal, a grand collection of 46 services. These include access to many of Google's biggest databases such as Books, Maps, and Places, as well as to some of Google's lesser-known products like the Web Fonts Developer API.
I suspect many developers will be most interested in using Google Compute Engine when they want to poll these Google databases fairly often. While I don't think you're guaranteed to be in the same zone as the service you want, you're still closer than when traveling across the generic Web. Google offers "courtesy" limits to many of these APIs to help out new developers, but you will end up paying for the best services if you use them extensively. These prices are changing frequently as Google and the developers try to figure out what they're really worth.
Google says some experimenters are already pairing the Compute Engine with the App Engine to handle expensive computations. In one of the experiments, Google worked with a biology lab to analyze DNA PDF. The data was uploaded through an App Engine front end, then handed over to a block of Compute Engine cores to do the work. The Compute Engine machines were started up when the data arrived, and they were shut down and put back in the pool as soon as their work was done.
You can start and stop your machines by hand and track them with the Web portal, but I suspect many will end up using the command-line tool. Google distributes some Python code that handles most of the negotiations for reserving, starting up, and stopping servers. While the Web portal is OK for small jobs, the ability to easily write scripts makes the command-line version more useful.
The command-line tool is also more powerful. You can create instances through the Web GUI, but there's a limit to how far you can go. I couldn't figure out how to log in with SSH through the portal, then I switched back to the command line. Perhaps Google should check out some of the HTML5-based tools like FireSSH that integrate SSH with a Web page. The only real challenge is finding a good way to hold the SSH keys.
One of the more interesting features is the way to bind metadata to each computer. Google is clearly intending for people to write their own automatic routines for bringing machines online and off. If you want your software to be self-aware, it can look at the metadata for each instance, and the instance can also read the metadata about itself. This lets you pass in configuration information so that each new machine is not born with a clean slate.