see: http://docs.amazonwebservices.com/AWSEC2/2008-02-01/Develope...
That said, I fully expect amazon to fix this, just as they have already added high memory and high cpu instances. They seem to take feedback seriously and have addressed most of the major complaints to date.
Being able to provision new machines with a simple command is reason enough to use them over more traditional places.
dedicated servers allow for much faster ip takeover (critical for high-availability) and had lower latency. ec2 rocks for scalability.
in the end we decided to hold off on ec2 until they address these 2 deficiencies.
Yes. A physical server is probably 8 cores and 32GB RAM, so an instance is 1/Nth of that.
If so, does the load from one customer's server instance negatively effect all of the others on the same hardware?
Not much, since CPU and RAM are not oversubscribed. I don't know about the disks and network.