Managing reserved Amazon EC2 instances

I installed 3 instances last night of a vanilla Windows 2003 server. The first two took about 45 minutes, the 3rd, about an hour later, took a full 2 hours before it was ready!

Those had nothing in them at all, without any S3 usage. I doubt there is a way to speed up that fundamental step apart from waiting for Amazon to make deployment speed improvements over time. So, I would conclude that a certain delay is to be expected and Kurt's advice is good, which is to keep 1 or 2 in reserve already prepared.

Another thing you could do is to create a new instance of your AMI type a few times and time it. Then try a few times with your S3 storage and see how much time that adds to it. I assume that the availability zone should match between the image and S3, although I don't know how much time difference that will make.

Once you've determined the max time to provision, keep ahead of the load/usage by that many minutes.

In theory, that's the idea, but don't host a webserver or anything on it that can't die. This is traditionally used for distributed jobs like data churning, rather than services, since if the spot price goes over your max bid, your server turns off.

Also, just making sure you have your numbers right, it's $0.085 per hour for on-demand, not $0.85. Might make a difference in your projections :)