We're about to dive into Odoo (OpenERP). We're planning on using Amazon EC2 for the actual installation, and put the postgreSQL database server on Amazon RDS. (like this guide http://toolkt.com/site/install-openerp-server-and-postgresql-on-separate-servers/ )
If the RDS is only allowed to talk to the EC2 server, does this mitigate any security issues compared to a regular Odoo installation (where database and front facing webserver are on the same machine)? Is this an advisable setup?
Input data in your post is very vague to give you exact answer, but you may consider the following:
RDS
can talk to EC2
or any other clients and application servers. Connection only depends on your configuration. You can configure VPC and configure/restrict access to your database and application servers there.