I started with a 64 bit version of Ubuntu 9.10 Karmic server edition. (using a micro instance on Amazon EC2, costing less than $0.01 per hour)
I added GNOME desktop to it and NX server.
I re-bundled the instance into a new AMI.
Now upon trying to start another instance of my freshly created AMI. I am unable to select a "micro"/cheap server format.
What have I done wrong? What triggered this limitation?
Is Amazon really smart enough to know which AMIs will work on which Servers? I had it running fine on a micro server while I re-bundled it..?
Micro instances must be EBS backed, they cannot be AMI backed. You will convert it.
http://aws.amazon.com/ec2/faqs/#What_kind_of_hardware_will_my_application_stack_run_on
I'm not sure why you wouldn't be able to launch your AMI in a new micro instance but I think there's a bit of confusion here. Just to be clear, AMI and EBS are not two different options for backing instances. EBS and S3 are the two options for backing AMIs (from documentation located here under Using Amazon EC2 -> Using AMIs -> AMI Basics). Your AMI is very likely still backed by EBS and, therefore, acceptable for use with a micro instance. Something else must be going on.