I recently read that php applications can be deployed on Google App Engine using Quercus.
Is it possible to deploy cakephp applications too? Also, from the developer
While you can run PHP applications using Quercus on GAE, getting a typical CakePHP app to work might be an exercise in frustration. As far as I'm aware, there is no PDO driver for GAE's data store so you'd have to write your own CakePHP DataSource. Also, GAE does not support filesystem access, so things that you take for granted in Cake (such as filesystem-backed caching) won't work correctly on GAE.
If you want to run a CakePHP application "in the cloud", you might consider using a service that properly supports PHP (e.g. RackSpace Cloud, PHPFog, PagodaBox, etc).
Speaking to your add-on question, the architecture of a traditional hosted application is slightly different than a true "cloud application", specifically the fact that cloud applications are designed to scale horizontally. This is a complex topic in and of itself, so I would suggest doing some research on your own about cloud application architecture to familiarize yourself with the concepts.