What are the costs like for building resource intensive apps on ethereum? Would be interested in comparing with centralized compute providers.
If that is correct, then ethereum and Amazon spot instances could be interchangeable - low availability, but potentially lower cost due to the bidding process if there is a lot of excess compute power on the network.
Ethereum is the most expensive computational environment you can imagine. However, it is also the highest trust. Its not for computationally-limited (gaming/data analysis) its for trust-limited (financial applications/privacy)
There is an effort to build a computation market on top of Ethereum, but the computation happens off the chain.
The benefit you get is this: When 500 computers are running it, then you know you can trust the execution and the 'state' of the virtual machine when it is only being run on 50 computers (or 1 in case of a centralized application).
Basically you pay a "gas price" for every opcode executed by the EVM. Clearing a memory address? You pay for it. Setting a value? You pay for it. etc. etc.
(In the above paragraph "you" refers to the "user" sending the transaction)
You really need to think about what you are doing, whether it is allocation, computation, etc. Minimize the number of opcodes and the number of expensive ones at that. To date the contracts are quite simple, although some really interesting things are in the works.