I'm using Amazon cloud right now, and the biggest performance issue is horrible I/O performance. As long as something fits RAM it's fine - once it's too big it gets ridiculously slow (in many different scenarios). There are only so many ways one can avoid hitting disk - so the question is - does Amazon or some other cloud provide SSD option?
Not really an answer to your question but it could be a possible solution :)
Did you know you can put EBS blocks in software raid? It helps a lot for throughput, in latency though... it probably won't help so it would depend on your load. Here's a tutorial: http://orion.heroku.com/past/2009/7/29/io_performance_on_ebs/
And another option might be, get a heavy cloud instance and use ram drives.
Disk I/O in the cloud is a well known issue and people generally engineer around it by making judicious use of caching and in-memory databases. What type of application do you have? Is this a database or some other type of system? If it is some type of batch or ETL processing then you might want to look at Hadoop, or changing your overall architecture to fit with the cloud.