I've been playing about with it today and well... for want of a better word, it's awful.
GME is an interesting experiment and I'm hoping it will improve over time (especially the editor itself!) but I think I'll leave it be for now
When you save your applications they are saved to Google Code (eg, Google Code) and when you publish the application it gets published to http://your-app-sub-domain.googlemashups.com. There are no other options at the moment.