If you are getting the error “”issubclass() arg 1 must be a class”” with Google App Engine SDK for Python on Linux its probably because you are running Python 2.6 (and will probably happen to you when you run Ubuntu 9.04 – 2.6 is the default there).
Just run the dev server under python 2.5 (i.e. python2.5 dev_appserver.py)