What you describe is accurate. In fact, there's one level more because the Linux instance you run is already running as a nested guest. So in your scenario there's 3 hypervisors involved (Amazon Xen, Ravello HVX, KVM) and then your Docker host.
More seriously, I am very bullish on Docker myself. But I see it as a supplement rather than a replacement for virtualization.
What you describe is accurate. In fact, there's one level more because the Linux instance you run is already running as a nested guest. So in your scenario there's 3 hypervisors involved (Amazon Xen, Ravello HVX, KVM) and then your Docker host.
More seriously, I am very bullish on Docker myself. But I see it as a supplement rather than a replacement for virtualization.