Something that would help to answer questions like: Under which circumstances does it make sense to migrate a web-application +DB hosted on 5 dedicated servers to EC2?
I would counsel a move to EC2 in the following cases:
1. You need the ability to run a large pool of additional servers on short notice. Say you do something computationally expensive and fairly time-sensitive, and need a big burst capacity.
2. You want to be able to set up and tear down numerous staging and testing environments.
I'm sure other commenters can add to this list. My generic advice is, stay out of the cloud unless you know you need it. It's expensive and setting it up is a time sink.
Our scaling issues are such that we can slowly add more servers to match our organic growth. We do have it as a backup plan in case we'd ever go faster than we are growing now but that would be a stopgap. Bandwidth costs are the main dealbreaker, we're currently buying at about $5-6 / Mbit and EC2 simply can't match that.
This is for a site that serves up about 800K uniques every day and is very bandwidth intensive. We'd be paying amazon roughly 10 cts / second!