This can also happen if there are two or more Google App Engine SDK libraries in the build path. This happened to me when I included libs from my project, and also included those that were installed through Eclipse.
The best way to verify this is to go to Project Properties> Java Build Path. Make sure that only one appengine-api- * (* is a wildcard for file names). The installed Eclipse SDK is included in the App Engine SDK.
The image of what I'm talking about is below

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