1. You'll always pay more renting than buying in the long run. The difference is a factor of how efficient the market is, I guess. A high memory quad XL instance on Amazon has near enough 64GB of RAM, which you can have for $2.00 per hour, or $5300 for a reserved instance for a year. If you wanted to buy that much outright, you'd be paying a couple of thousand just for the DIMMs. Then you've got to buy and maintain the box to put them in, knowing that it'll have depreciated significantly over the year. I guess it depends on what you're actually planning to do with the RAM once you've got it, but it doesn't look like too bad a deal to me.
2. That depends on your VPS host, really.