Ubuntu provides official Amazon Machine Images (AMIs) for use on the EC2 cloud. By default you get a root filesystem of 8GB. If you're keeping all your application data on a separate partition (often a wise idea), the 8GB root partition may be more than you need.
You can shrink the root volume by stopping the instance, detaching the volume, attaching it to another running instance, and rsyncing its contents into a fresh, smaller volume. There are detailed instructions on the Ubuntu forums. However, there is one extra critical step that's required on at least the newest Ubuntu images (Natty) that I haven't seen documented anywhere.
By default, Ubuntu locates the root filesystem by volume label, not by device name. Take a look in /etc/fstab and you'll see which label it's looking for (currently "uec-rootfs"). So after you copy into the new volume, do
(assuming /dev/xvdg is your new volume).
e2label /dev/xvdg uec-rootfs