I just created two 512MB Ubuntu instances and here are my thoughts. (+ indicates positive, - indicates negative, ? question)

    + You can use private networking for cross-instance communication.
    + You can even communicate with other AWS services by using VPC peering.
    + Hourly billing.
    - The firewall rules are not shared. You can't create a single rule and attach to multiple instances.
    ? What are the network throughput caps? Can't find it anywhere?
    ? Are the disk physical or using EBS?
    ? Can you snapshot a running instance, or does it have to stopped?