Amazon was one of the first to offer pay-as-you-go machine instances, and is currently the largest of these service providers, with data centers in all the right places and with a wide selection of instance types.
Amazon Web Services, Elastic Compute Cloud (aka “AWS EC2″ or simply “EC2″) allows you to spin up one or more virtual machines, and withing minutes (sometimes seconds) you can login to the new machine instance and configure it for you needs.
EC2 machine instance types range from ultra tiny (micro instances) all the way up to entire clusters of high-memory multi-core nodes.
As with most AWS services, you only pay for what you use. Prices vary slightly be geographic region, and also vary based on the Operating System you select for the machine instance (e.g. Windows is more costly than Linux, because you are essentially leasing a copy of Windows on an hourly basis). See the AWS EC2 pricing page for details.
If you are currently using EC2, or have used it recently, please comment on what you like/dislike about it. This will let other readers know what to expect, and help them select the best service for their needs. Thanks!