The spot prices are generally much less than the normal on-demand prices for EC2 servers but the prices also vary widely. Does it ever happen that the spot price is higher than an on-demand price?
If not, doesn't it make sense to always use spot instances with a max bid equal to that of the normal on-demand server? That way the spot instance will theoretically last forever (because the spot price will never cross the max bid) and will save you significant money. Does everybody already do this?
Yes, the spot price can go over the on-demand price - for example, I just checked recent prices for an m1.xlarge image, which costs $0.68 / hour on demand, and the spot price spiked up to as much as $1.00 / hour.
When I was using spot instances heavily about a year ago, I found that it was possible to drive up the spot price by requesting multiple instances in one spot request. Effects like this made me decide that spot instances are definitely not a substitute for on-demand instances.