We have installed WordPress on EC2 t1.micro instance and installed Buddypress on top of that, everything work fine for single user, but when two user access at same time, site goes down, because of RAM issue, httpd (Apache) takes maximum memory, how to overcome this, is there any configuration need to do in http.conf file or any network / traffic blocking tool do i need to install?
Micro instances are notoriously too small to handle WordPress and MySQL together. They're going to thrash (overuse the disk swap feature) or just run out of RAM and crash.
You are going to have to do a lot of tuning to get this right on a micro instance, and it is never going to be rock-stable. It's a pain in the neck. If your time is worth more than a dollar an hour compared to hosting fees, you should upgrade to an instance with more RAM, or sign up for one of the many US$6 per month shared hosting accounts available in the world.
Where to start tuning? Try setting a value in the Apache httpd.conf.
Set MaxRequestWorkers to a low number. You might try 4. When this number is low then you also won't have many simultaneous clients connecting from your Apache/php to your MySQL server.
Requests from web-browser clients will be enqueued when all your workers are busy. That works correctly, but may make your web site seem slow to your users. See the backlog parameter in the Linux documentation for listen(2) for an explanation of that queuing.
That will save both on Apache RAM and MySQL resources.
http://httpd.apache.org/docs/current/mod/mpm_common.html#maxrequestworkers
Then you probably should look at the my.conf file for MySQL, and see what you can play around with.
Edit MySQL, Apache, and php are all drawing on the same pool of RAM -- 512MB if I remember correctly. Reducing the number of Apache workers should help control RAM usage by Apache (and php, which is probably running in the Apache server's address space). Do that.
Then, go find the memory_limit in php.ini. It's set to 128M in many standard installations. Try reducing it to 64M or 40M. That will make each php instance use less RAM. But, if your WordPress installation is complex (lots of plugins, fancy theme), it may make some pages fail to load. WordPress will announce the problem as memory running out. http://php.net/memory-limit
Then, jump into MySQL's my.ini. The standard MySQL install comes with a file called my-small.ini, which contains the configuration parameters for a small MySQL instance. Yours can be small: WordPress's tables contain hundreds or a few thousands of rows, not hundreds of thousands. Save your old my.ini and then copy the contents of my-small.ini into my.ini. Restart your MySQL server after doing that.
Those steps may help you squeak by in a micro instance. They may not. They are, I suppose, worth a try.