This is cute, but doesn't really do anything which isn't already possible with EC2 and S3. The most critical limitation of EC2 and S3, at least where databases are concerned, is the "eventual consistency" model: If you store data, you'll eventually be able to get it back -- but there are no guarantees as to when.
When I heard rumours that Amazon was going to be launching a database service, I hoped that it would solve this problem; instead, it seems that Amazon has released the world's first "database" which not only transactions, but even lacks consistency!
It sounds like SimpleDB runs on EC2, meaning it can't do anything that you couldn't build yourself on EC2. If you replicate data across enough EC2 nodes you can get durability (at the cost of complexity and high MTTR).
When I heard rumours that Amazon was going to be launching a database service, I hoped that it would solve this problem; instead, it seems that Amazon has released the world's first "database" which not only transactions, but even lacks consistency!