First off, Jeff thanks for the link
Second, the site http://www.servethehome.com has grown from a micro instance a year ago, to a small instance and now requires a medium instance just for the main site.
Still looking to colo a machine in the near future. Big impacts are much higher storage I/O, significantly more memory available. The other main impact is that the EC2 compute units get destroyed.
Just by way of comparison, the AMD Opteron 6128 is a low cost (~$100) server CPU that has 8 physical cores. An Amazon EC2 micro instance is about as powerful as a single Opteron 6128 core under ESXi.
The one thing that you do get with AWS is a suite of tools that makes management easy. Also, scaling is made much easier with AWS and you get things such as the ability to quickly add components such as load balancers to the system.
Still, if you need things like SSD performance, high speed CPUs and lots of memory, it is usually less expensive to build a 1U similar to yours. A really good application example is a Minecraft server where you need all three. AWS cannot cost-effectively handle that workload.