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Liu made the estimate in a personal blog post recently, stating that he used a combination of data and DNS queries within EC2, all of which were publicly available, to come up with that number. The number indicates just how many physical server racks are used by Amazon's Cloud Service multiplied by the number of individual servers that could be housed in each rack.
However, Liu did mention that there are a number of different obvious holes in his number. Liu notes that the total number he gave is a complete estimation on his part and that Amazon could very well configure its systems differently than he thinks. In addition to that, if Amazon has any racks without an active server running on it then it would be impossible to count, which would also displace Liu's accuracy in the total.
Regardless, Liu's post has stirred up quite the buzz in the media, though that could be because it is one of the best estimates to Amazon's cloud size currently on the web. Amazon is pretty secretive with their information on their Elastic Compute Cloud, making these hypotheses a necessity.
Source: PC World - Nearly a Half Million Servers May Power Amazon Cloud
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