last time i tried windows in micro instances it wasn't usable. just to download and install all windows updates on the first boot took something like 6 hours due to the heavy cpu throttling (something that took a couple of minutes on a small instance). but maybe it's fixed now?
The way to do this is start the image as a small or large instance, apply all patches, install SW, then restart it as a Micro. When you need to install something again, restart the server as a larger instance type first. It's a pain.
The Micro instance is actually very fast for 5-10 seconds of CPU time, but is artificially throttled to very slow (like <5% CPU) after you use a few seconds of CPU.
I'm curious how people use Micro Instances in production, b/c you have to manage the CPU time very carefully, and the machine becomes unusable if you exceed it.
I've been able to use it as an interactive windows or linux shell in the cloud, but not much else.