I've noticed that the official Amazon repos only host nginx 0.8 which is now considered a legacy release. Short of manually compiling from source what must I do to upgrade to the stable 1.0 version of nginx via yum? Does anyone know of Amazon's reasoning to not include the 1.0 release? If there's some bug or known issue I'm fine sticking with 0.8.
Amazon Linux is compatible with CentOS 5 repositories, so you can follow the instructions at http://nginx.org/en/download.html to add those to your instances.
Generally, distributions intended for server usage wait until the next release of the distribution to include major new releases of packaged software. You wouldn't want to do
yum update and find out that your application suddenly stopped working because nginx 1.0 has breaking changes.
Personally, I prefer to build manually, dropping it into /opt/nginx-$VERSION/. This way you can retain other versions and it's fairly painless to change your init scripts once you have them set up as you like and tested the current version. Even if you catch a late-noticed bug, rolling back to an old version is easy. This also does not leave you at the mercy of the distro team to determine the package version that you're going to use. (I can make that decision myself, thank you very much...)