<p>I'm considering using Amazon's EC2 with a windows instance &amp; SQL. I've seen <a href="http://www.brentozar.com/archive/2008/11/bad-storage-performance-on-amazon-ec2-windows-servers/" rel="noreferrer">some criticism</a> of the perf of the SQL instances here. I'm wondering if any SOers have and first  hand experience and can comment on the performance.</p>

I've just fired up a 32bit Server 2003 m1 small instance with SQL 2005 Express on and had a quick play. Was just using the supplied machine disk, not an attached volume. After reading the article linked to in your post I was expecting performance to be horrific. It wasn't great, but wasn't bad either.
My 'tests' were rather simple. Created a table with an identity column, a few text (varchar) colomns and a few more integer foreign key columns with relationships to some basic lookups.
It took about a minute to insert 1 million records, and about a second to make updates to 200,000 row blocks of data using Like '% to force a table scan.
This doesn't tell us anything about what performance will be like under heavy load.
Conclusion: Not great, but could be worse - especially given the manner in which 'disks' are stored on aws. I don't think this is really the place for a big SQL Server installation, lots of small installations might be a more insteresting prospect. 
I'd also be interested to see what performance was like with the db spead over lots of small attached volumes.
I'm hoping to use EC2 for an upcoming project and will be doing some more thorough testing over the next few weeks. - I'll post the results as they're available.
Looking forward to seeing what other peoples experiences have been..