When I first started developing Django apps on Google App Engine (GAE), I downloaded the google app engine launcher. Installing this will install the latest version of the SDK, and will (if you let it) update your path to point to it. This is fine if you are always using the latest version and don’t need to use an older version for some reason. If that is the case you will need to uninstall GAE launcher, find an old installer for the version you want and reinstall.
A more manageable way is to not use the GAE launcher, but to download the SDK manually, then set up a virtualenv to use a particular SDK. I also use virtualenvwrapper to help me switch easily between environments.
This is the pertinent bit – in the folder where your virtual envs are stored, add the path to the app engine sdk in bin/postactivate. Postactivate gets run when you activate the virualenv through virtualenvwrapper. E.g for something using version 1.8.8 you might have something like:-
# This hook is run after this virtualenv is activated.