I think EC2 and Rackspace Cloud serve two different groups. EC2 is the only provider on which I've actually been able to boot 50 nodes, have them come up in a few minutes, use them for an hour, and kill them all off. That sort of thing would be a giant pain on Rackspace Cloud, since they e-mail you the root password when you boot an instance. Also, Rackspace Cloud accounts are limited to 50GB of RAM usage unless you contact them to increase the cap. (Rackspace only mentions this in their API docs:
http://docs.rackspacecloud.com/servers/api/v1.0/cs-devguide-... See section 3.8.2: Absolute Limits.)
Still, most small and medium-sized companies would do best to go with Rackspace, Linode, or something similar. You'll get better support from them and it's not often that a 10 person company needs a ton of servers for a short period of time. Even then, you could use both: short-lived instances on EC2 and stable, well-supported, long-lived stuff on Rackspace.