Moving site to amazon EC2 - better to have 1 large instance or 2 medium instances? I currently have a website which is running on windows 2008 r2 standard along with sql 2012 express. All on the same box. The site gets around 700-900 visits a day,although that is slowly going up (yea us!). 

The database itself is around 2gb in size and makes use of full-text search. The bulk of the full text search is done against a product table which currently has about 36,000 records in it and that's slowly growing.

We're leaning towards moving the site over to amazon EC2. 

I have 2 basic questions


Would it be better performance wise moving it to EC2 or keeping it on a dedicated box? The reason we're considering the move is the ability to expand capacity if/when the website becomes busier without any downtime. We've been putting a lot of effort into getting more traffic and it's slowly starting to pay off.
If we do move it, would we be better off getting 1 large EC2 instance and putting everything on that one instance or would we be better off with 1 medium EC2 and 1 medium RDS instance? I don't think there's anything really heavy going on with the website itself, most of the resource i think are being used by the database. Highest mem usage for the w3 process is around 200megs.


I don't want the site to run any slower then it's running right now. Faster would always be nice. Budget is around $250/mo but we're willing to go higher if we see performance gains. Using either 1 large or 2 medium instances looks like it'll cost around $170/mo and that includes a WEB license for sql, which would be an upgrade for us as we're running express right now.

Thanks
If you expect your traffic to increase you will have to split your web and database layers at some point. So probably would be better to get separate instances for web and database servers now. Then you can start looking into making your web app scalable (so you could add additional web servers under a load balancer to handle traffic peaks) and tuning your database for better availability and performance.