I am confused. I thought these were both hosting solutions that Google sells or makes free. What is the difference between the two?
Google Code is a SourceForge-style hosting solution for open source projects: you can host your code in a supplied Subversion or Mercurial repository and document your project in a wiki. You cannot run code on Google Code, only upload your source code to share with others. It's free.
Google App Engine is a general cloud application host. You can host web sites written in Python or Java, actually running code on Google's servers, with cost proportional to usage (it's free up to some amount).
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