This is nice. I work at a University and I spoke to the guy who runs our High Performance Computing system about Amazon EC2 the other day. He made a good point which is worth noting:
You can bring up a lot of EC2 instances to run large jobs in parallel and get a lot of CPU horsepower, but the main drawback of EC2 is the network. Most of the jobs that run on our local "super computer" involve processing terrabytes of data. Transferring terrabytes of data to the cloud is painful, and will continue to be painful for a long time to come. I suspect even transferring terrabytes of data between EC2 instances wont be smooth either.
Still, EC2 is great and I love how fast they're bringing out new features.