I found starting and stopping the GAE SDK from Eclipse would sometimes not be
enough for GAE to deploy a code change to a servlet. This would occur
unexpectedly, even after working form multiple code/test iterations. A
recommendation I found on a Google board was to touch the appengine-web.xml
file. Which works just fine.
Udacity is free online university and offers a CS253 intro to web development class. Since I am currently a web developer/architect in ASP.Net (and recent project has brought me back to Java) it is a bit light. However, it does offer me a nice problem set and my first exposure to writing cloud apps with GAE and Google Datastore. Steve Huffman, who developed reddit, is the instructor and does offer nice real-life stories. Give it a look ......
If you installed the Google App Engine separate from the Eclipse plug-in you may see the error message above when trying to create a web application. If so, go to Window>Preferences>Google>App Engine and add the directory where you unziped the App Engine.