Google Compute Engine allows users to launch and manage virtual machine instances on Google's infrastructure. Key features include quotas on resources, creation of instances specifying zone, machine type, and boot options. The Google Cloud SDK and gcutil command can be used to automate tasks like creating instances. Startup scripts enable running custom commands when an instance boots. Backups can be done using disk snapshots, images, or by bundling a disk. VPN services can also be set up on Google Compute Engine using OpenVPN.