Installing testlink on Amazon EC2 instance

What does it provide? Quite a lot, if you're not a DBA.

1. Automated snapshots to the second for the previous five minutes (configurable up to 8 days)
2. DB snapshots are automatically scheduled, managed, and stored
3. HA without having to think about it? Sign me up!

As for your additional questions; the RDS DB is persistant, and it's equivalent to setting up an EC2 instance with an Elastic Block Storage (EBS) and storing your database files on it. So yes, you've got a semi-equivalent machine--albeit, you're now responsible for managing backups et al, and scalability will be an issue should you need more machines.

RDS is aimed primarily at people who want to use a database--but don't want to manage it. Perfectly agreeable, and friends and peers I've talked to about Amazon's services in general have smiled on RDS. It costs a bit more, but it also gives you more. You'll just have to weigh how much you like maintaining your database.

One of the things that we ran into with a small RDS instance was the # of connections setting. It's a formula based on RAM - and it only allows ~ 150 connections on a small DB. That's the first thing that I would look at.

SHOW PROCESSLIST;

would be the command. If you are not using some sort of connection pooling in your app, I could see hitting that limit fairly quickly.

Just a shot in the dark, but good luck anyways!