Software Implementation of RAID 10 on a Windows Server 2008 running on Amazon EC2

What if disk 1 fails? Will it automatically swap over to disk 2?

It depends on the computer and how the hard drive failed. If the BIOS on your computer still sees the first drive it will probably attempted to boot to it. Typically with software-based RAIDs you have to reconfigured boot drive after a failure. If you need the computer to be able to survive a disk failure with zero intervention then you really are going to need a good hardware RAID controller.

Should I use some tools for monitoring my RAID 1?

Windows will log RAID events to the Eventlog. There are lots of tools for monitoring the event logs mentioned around the net and on this site.

Finally, I'm looking for a tool to test the speed (read/write) of my harddrives,

I like BST for for quick testing (http://www.nu2.nu/bst/).

Iometer is far more extensive but it does get a bit complicated because of all the available options. (http://www.iometer.org/)

Your approach sounds very good - but I can think of a possible way to improve it.

To reduce the impact of data loss since the last backup, and EBS volume failure (unlikely, but still possible) you could store your data on a separate EBS volume than your system files, and back up the data volume more frequently than the system volume.

With your current strategy, you'll lose any data that was created between the time of the last backup and the time your instance failed. With the new approach, the data volume will be getting written to right up until the instance failure, so you can just reattach it to your new instance once it's up and running.