I recently purchased a server with similar specs to a small instance Amazon EC2 VM. I thought this would be a good test machine for a web server role I'm planning to run in EC2. However, midway through the Windows Server 2008 R2 install, Windows refused to continue because my machine had less than 4GB of RAM.
I've seen others who have claimed to run small instance EC2 instances with Windows 2008 Server AMIs. How does that work?