Amazon has just announced the availability of a new service: the Amazon Relational Database Service (Amazon RDS), based on MySQL 5.1 (AWS Blog, RDS@AWS).  They support both InnoDB and MyISAM but not replication.  See notes from: Mark Callahan@Facebook, Robert Treat@OmniTI, CannelWeb... RDS's pricing depends on the size of the DB instance, ranging from 1.7 GB, 1 ECU to 68 GB of memory, 26 ECUs. Also note that EC2 has lowered its prices.

Quoting from the RDS site, this is how Amazon is presenting the value prop:

Amazon RDS automatically patches the database software and backs up your database, storing the backups for a user-defined retention period. You also benefit from the flexibility of being able to scale the compute resources or storage capacity associated with your relational database instance via a single API call. As with all Amazon Web Services, there are no up-front investments required, and you pay only for the resources you use.

More AWS info at Products, FAQs and elsewhere at AWS. Overall, this is a good move from Amazon, and the whole space is going to continue to change rapidly in the near future, see for example AWS@Oracle and Oracle@AWS.