You can find the code we wrote here, along with the testing infrastructure:
https://github.com/erichocean/appengine-geospatial-lookups
Like Foursquare, mobile clients send their current location, plus a search radius, and App Engine code returns a result set ordered by distance.
We were getting query times with realistic data set sizes in the ~13 second range from the code you linked to. With the code above, we're ~40x faster. YMMV.