After reading this my question is: will his system work on a small instance on ec2 instead of micro? It sounds as though the majority of issues you're describing are micro-specific and while there's a thousand "tune wordpress" blog posts out there it sounds like this one is a good idea minus the use of a micro instance.
The techniques Ewan outlines are spot-on; my clarification is for people to have the right expectations of the Micro's, not on the information he provides on tuning a WordPress install.
That said, Smalls and up on EC2 will give you more consistent performance (they aren't built to provide the spike-performance Micros are) BUT are still relatively subject to "noisy neighbors".
The smaller the instance, the bigger the impact felt; it is still possible to have a small grind to a halt because of a noisy neighbor and typically I do not see people hosting web front ends with smalls because of the erratic and poor performance (in general). Possibly a fleet of them behind an ELB, but even then I see Mediums and Larges much more often as the "web server".
The mediums provide an awesome (and typically unsung) balance between monthly cost and performance on your way to a large (which can get quite expensive).
Great makes a lot of sense thanks for expanding. Like you touch on I think price is the big issue for most people who aren't looking to build for 15mm/month but are just looking to sleep at night knowing that getting to the frontpage of digg, reddit, techcrunch, hackernews, etc won't sink the ship.
