Amazon EC2 allows users to integrate virtual machine instances and configure scaling capacity. It provides templates called AMIs that users select to start instances, which can then be monitored and terminated as needed. Users determine instance locations and storage options, and are billed only for resources used like hours and data transfer. EC2 offers features like hibernating instances for later resuming, high I/O instances, custom CPU configurations, and flexible storage options to meet different workload needs. Its benefits include reduced booting time, scalable capacity, complete server control, flexible OS and storage choices, and built-in security.