Considering their "Continuous Protection" feature, could they be streaming a write log out to S3? I think that way they could use the backup as the sole guarantee of durability, and use instance storage for the database.
EDIT: also, I'm not sure if this is generally known elsewhere, but might they not be on ec2, they are advertising 1.7 GB cache, which is the same as a small instance, except without any room for the operating system or postgres itself.
EDIT: also, I'm not sure if this is generally known elsewhere, but might they not be on ec2, they are advertising 1.7 GB cache, which is the same as a small instance, except without any room for the operating system or postgres itself.