I have found the problem in context.el

- - - - -
diff -aur auctex/context.el auctex.new/context.el
--- auctex/context.el    2010-06-19 08:47:11.000000000 +0800
+++ auctex.new/context.el    2010-09-18 15:43:50.000000000 +0800
@@ -1486,7 +1486,7 @@
 (defun ConTeXt-expand-options ()
   "Expand options for texexec command."
   (concat
-   (let ((engine (nth 4 (assq TeX-engine (TeX-engine-alist)))))
+   (let ((engine (eval (nth 4 (assq TeX-engine (TeX-engine-alist))))))
      (when engine
        (format "--engine=%s " engine)))
    (unless (eq ConTeXt-current-interface "en")
- - - - -

It should evaluate the value of variable. Hope it can be fixed soon.
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