If you use the app-engine plug-in deploy command using AppEngine SDK version 1.2.8 it will fail with the following error:

[java] Bad argument: email requires an argument, for example, "email=FOO" [java] usage: AppCfg [options] [] [java] Action must be one of: [java]   help: Print help for a specific action. [java]   requestlogs: Write request logs in Apache common log format. … [java]                         request logs are returned. [java]   -n NUMRUNS, --numruns=NUMRUNS [java]                         Number of scheduled execution times to compute [java] Java Result: 1

Google changed so deployment is targeting a directory instead of a war file.

What you need to do to deploy is instead to use the AppEngine built in command to deploy

%APPENGINE_HOME%/bin/appcfg.cmd update c:\users\morten.grails\1.2.0.RC1\projects\\stage

After this all I had to do was to update my deployment scripts, and the stage is set for some serious Grailsing.

I should point out that all previous workarounds for working on Windows still need to be in place.