Tomorrow's builds of precise should have 'ide=halt' turned on.  I verified that 
adding that to /boot/grub/menu.lst allowed me to boot on a t1.micro.
ubuntu@ip-10-243-42-222:~$ uname -m
x86_64
ubuntu@ip-10-243-42-222:~$ cat /proc/version_signature
Ubuntu 3.1.0-2.3-virtual 3.1.0
ubuntu@ip-10-243-42-222:~$ cat /proc/cmdline 
root=LABEL=cloudimg-rootfs ro console=hvc0 idle=halt
ubuntu@ip-10-243-42-222:~$ ec2metadata --instance-type
t1.micro

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https://bugs.launchpad.net/bugs/881076

Title:
  precise kernels do not boot on ec2

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