I manage both Linux and Windows EC2 instances for a couple of different businesses.
For the Windows boxes I normally connect via Remote Desktop to do virtually everything. For Linux I use WinSCP and PuTTY consoles.
For EC2-specific operations I use the Amazon web console or the Amazon-supplied scripts from my PC.
It depends what you mean by "manage instances".
If you mean the ability to launch new instances from an AMI, configure security groups, manage EIP's and so on, the ElasticFox plugin to Firefox is great (in spite of having occasionally buggy releases). The command line tools supplied by Amazon for this purpose could be a good basis if you're writing automated scripts, but I find ElasticFox much better for my work.
To work directly on the instances, I use WinSCP for both Windows and Linux instances (I installed a third-party SFTP server for Windows), PuTTY for Linux and Remote Desktop for Windows.