EC2 Spot Instances are cheaper than On Demand instances and even Reserved Instances.

BUT there are several challenges in trying to run a Spot Instance for "normal" Linux-based workloads:

1. EC2 does not allow specifying an EBS volume as root of a Spot Instance, only an AMI image.
2. Every time a Spot Instance is re-launched, a brand new EBS volume is created from the AMI (see point#1), which leads to the creation of a fresh new EBS volume wiped and restored from the AMI.
3. Spot Instances cannot be Stopped, they can only be Rebooted or Terminated, that exacerbates issue#1 as it means it's impossible to simply reattach your original EBS volume to /dev/xvda.
4. Important system information stored in /var/log, crontab, apt-get system files, etc, not to mention actual application config and data files, are LOST every time you restart a Spot Instance (directly caused by points #1 and #2 above).
5. Essentially, the Spot Instance architecture requires a full redesign of your system to save everything of importance somewhere else (outside of the filesystem), but no Linux distribution exists which does this out of the box.

EC2-Spotter is a utility that brings together the best of both worlds -- Spot Instance pricing with the simplicity (persistent EBS filesystem) of On Demand & Reserved Instances. This sounds like cheating, but apparently is not forbidden by the Amazon Terms Of Service.

The '24x7' version works differently from the 'classic' version, so check the respective sub-directory.

See above.

The '24x7' is in Production use at CTC. The 'classic' version was tested but never went live.