Eclipse has been my tool of choice for AppEngine development because of the great plugin supplied by Google. I have been using IntelliJ for all other Java, Scala, and Clojure development so I decided it would be nice to switch AppEngine development to IntelliJ 9.x also. If you decide to do this also, after a few false starts, I now have a recipe that works for me:

• Install the latest Java SDK for AppEngine and set a symbolic link to it so it is easy to swap in newer versions as they are released.
• Don’t import the eclipse project. Instead, I had better results creating new empty AppEngine projects and copying in my src directory and the contents of the old war directory to the web directory.
• Create an AppEngine facet, entering the symbolic link to your Java AppEngine SDK directory.
• Create an artifact of type Web App Exploded.