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I'm using Centos right now as it seemed like the most popular choice, but even the most recent 5.5 has a lot of truly ancient software like Ruby 1.8.5 (that's 2006!).

Ubuntu doesn't suffer from this, but it's concept of user accounts (no root at all), seem to be quite incompatible with EC2's (root for everything), and I'm wondering if it will cause any problems.

Any advice?

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Ubuntu is a pretty good choice for Amazon EC2 usage. It is quite up to date and stable. They do even have their very own AMI release cycle http://uec-images.ubuntu.com/lucid/current/

Ubuntu's concept of user account (no root at all) is IVMHO the way to go.

Amazon EC2 does not force you to use root for anything indeed. They do only force you to log into the box using the ssh keypair they provide during the first login into and instance booted from an AMI that you did not create.

Once you have created your own AMI, you can include your own ssh public keys or LDAP service or whatever you prefer using configuration management tools (chef, puppet, etc).

Just my 2 cents.

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