There is no soft limit on how much you can scale. We attempt to distribute all yours apps as much as possible to ensure there are enough resources for you to grow in to. If there is no more capacity on the host server for your instance(s), you are able to transparently migrate to one which does. This happens within 2 seconds.
I think the questions are just around the economics to make sure you guys stick around and can continue to offer it. My initial thought was that being able to scale up and down so quickly would require you to have a lot of idle resources sitting around at any given time, both on individual hosts as well as across hosts.
I'm sorry but statements like that freak me out a bit.
Do I get a warning when my instance is going to be migrated instead of resized, and an estimate of the downtime?
Because unless you found a way to defy physics you are pretty surely not migrating e.g. a 4GB Ram/40GB disk instance in anywhere close to 2 seconds.
If you had all of the instance data stored on a fast SAN, so that it was available to all of the hosts simultaneously (possible.)
And you had an ultra-high speed interconnect (40Gbit Infiniband would do) between hosts, for sharing the memory state when you migrate..
4GB of memory, at 40Gbit/s would be transferred in 0.8s. (assuming perfect throughput, all cows are spherical, etc..)