EC2 is all about the “elastic compute cloud.” In layman’s terms, it’s a server. In slightly less layman’s terms, EC2 lets you easily run and manage many instances (like servers) and given the proper software and configurations, have a scalable platform for your web application, outsource resource-intensive tasks to EC2 or for whatever you would use a server farm.

http://paulstamatiou.com/2008/04/05/how-to-getting-started-with-amazon-ec2

AWS Simple Monthly Calculator

http://calculator.s3.amazonaws.com/calc5.html 

and an alternative to EC2 using a VPS system such as Slicehost

http://www.slicehost.com/