It's expected to be out of beta by summer, and the dynamic IP issue is one that's expected to be solved by the time it's rolled out as production worthy. Our CTO is doing work on a file system and manager to deal with much of what's missing to make it truly useful (like configuring instances on the fly..) - and is part of the Amazon Developer's circle complete with an NDA to our company, so I don't know how much I can share. I'll post links to the stuff I know is public a bit later.
The cost of upgrading our aging infrastructure vs EC2/S3 is making it look *really* attractive when you consider we have 3 racks full at a colo here in Denver - which are on 24/7. We figure based on load tracking that we're doing that we'll end up with as little as 3 instances running and can expand infinitely to meet demand.