I use Eclipse for Java development in Windows on my laptop, but deploy to Linux on Amazon. Sometimes it would be a lot easy to develop on Amazon directly, particularly when dealing with platform issues.
I'd really like to be able to edit my files locally and then press a button and have the system run on an Amazon instance.
Right now I have to do a local build, copy jars up to the remote box, ssh in and run the program on the command line. It's a slow process.
Not if I'm dealing with platform-specific issues, or if the data files I'm manipulating are much larger than my laptop can handle, or if I'm doing benchmarking, or if I'm writing clustering code that behaves differently on on EC2 than it does on my local laptop. You can't do any of those things locally.