Practically any application can be made with Python (and with a bit of Assembly duct-tape, Python can even be used to make an OS - read: Unununium).
When you say "GUI development" do you mean an IDE, or GUI toolkits? Either way, there's both. PyGTK (for GTK+ development), PyQt (using the Qt toolkit) and several others (like PyWx for WxWidgets). And if you want a RAD development system (like VisualBASIC), check out BoaConstructor and IronPython (which is, sadly, Windows only).
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