There's definitely some cool applications for this that I hope you get into. For instance, providing format templates, i.e.:
- encode multiple resolutions for silverlight's smoothhd streaming and generate the metadata file (http://www.cmstream.net/ used to provide an opensource way to do this but they pulled the src for some reason -- I have a src snapshot if you want)
- encode mp4/ogv for use with html5 video players like sublime (http://jilion.com/sublime/video)
- support mp3/ogg for html5 audio
- support imaging (like autorotating batches of images based on exif)
Pricing does seem a tad expensive. 6cents/minute versus ~9cents/hour for EC2. I'd probably be more likely to build my own solution just because it's cheaper.