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After spending lot of time in altering DNS entries finally managed to get my site running in Google app engine as sub domain
UserAppId.appspot.com as www.UserAppId.mydomain.com
************How To MAKE WORK with WWW *************
http://mydomain.com OR http://www.mydomain.com
OK. How do I get my domain directly by www and not as sub-domain???
Here is the answer!!!!!!
Step by step to set up
Click here to go to http://appengine.google.com ( and sign in if you’re not already logged in )
Pick your google app id under ‘My applications‘
Go to Application Settings in the left menu> Click on Add Domain under ‘Domain setup’ and then follow steps to link your domain with google app [ Ignore this step if you've already linked your google app with your domain name ]