Your correct so far the entity limit is 1M. I've heard talk into looking 
into moving limit but haven't seen anything yet.

http://code.google.com/appengine/docs/java/datastore/overview.html#Quotas_and_Limits

What I do when I hit the limit is shard the data into multiple entities, 
and/or I use the datastore. 

Brandon Donnelson
http://gwt-examples.googlecode.com

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