If you don't know why this is a big deal, here's one reason: DRBD + GFS/OCFS2. This will make sort of mid-tier scaling setups significantly easier in EC2.

http://en.wikipedia.org/wiki/DRBD

Another big deal is mentioned at the end of the article; you should now be able to boot operating systems them don't support such as FreeBSD. I know that tarsnap was hosted on Ubuntu because FreeBSD wasn't supported on EC2 and now that OpenSolaris has an uncertain future I hoping that someone gets FreeBSD running on EC2.

The FreeBSD-EC2 issues have nothing to do with being able to load custom kernels -- if that's all it was, I would have been running FreeBSD on EC2 years ago.

FreeBSD's paravirtualized Xen code doesn't work on the Xen EC2 is using.

FreeBSD's support for paravirtualization is a bit immature right now. I'd definitely wait a bit on that.

This is good news. In my experiments with a bootable encrypted EBS volume I've wanted to use xts-aes on the volume, but none of the AKI kernels were new enough to support it. Now I can run a bleeding edge kernel, nice!

Is this the official AWS blog? Nothing wrong with typepad but I would have expected them to have something like aws.amazon.com/blog.

I've suspected that they've been rolling their own kernels for quite some time, it's rad that they're making these publicly available!

This is really cool. I'm looking forward to people getting other OSes up and running, too.