Amazon announced reserved instances and this is expected to give momentum to on demand or auto scaling architectures. Amazon also offers a reduced pricing for the reserved EC2 instances. There are 1 year to 3 year model pricing models and after making this one time payment hourly rates are reduced to $0.03 from $0.1 in the case of standard, small on demand instances. More information on pricing is here
It looks like Amazon will have to have announce data transfer rates along with computing time to pass on the real benefit of reserved instances to the end user.