I think virtualization is a fancy word for cloud.

Virtualisaton is the basic task you're doing, you're making a "virtual" computer. The idea of the "cloud" is more that these virtual machines are hosted in a room somewhere far away with other virtual computers there as well.

For instance, I can install VMWare and get virtualisation going on my laptop, but I wouldn't consider that the cloud. Similar, you can get bare metal computers on the cloud which aren't virtualised.

That's not strictly true, most folks agree that cloud services typically have an "on the fly" type elastic nature.

At the end of the day there exists a hypervisor... Virtualization.

Yep, afaik Amazon ec2 is still Xen.

So do VPS providers. Ask for a VPS and you'll get it in the same amount of time as EC2.

The difference is only surrounding automated deployment (cloudformation) or services that are offered (RDS)