on our (dedicated) Wowza server in Germany we are experiencing several difficulties from users who want to access our Wowza live streaming application from countries like Brazil or China. That's why we test our platform on a Amazon EC2 server in the US where especially people from those countries seem to have a better connection to and therefore a more stable performance.
We have a c1.medium instance there, which should be pretty good for this job (we even don't have hundreds of parallel streams by the way). But there are some interesting limitations. For example, each user nearly never gets a downstream performance of more than 2000 kbit/s (normally much less). Well, this is not a big problem for our rather less demanding live streaming platform but when it comes to downloading documents with rich media (or even a swf of just 1 MByte in size) you can see and wait for the loading progress bar.
The biggest problem we have encountered so far is a quite often poor connection of single users or all users of an application instance. Those users have usually top notch connections to the Web using dedicated lines and had never similar issues in the past.
There you can also see that the performance most often only affects people who access an application instance at first or in the first minutes. After 5-10 minutes or so (and maybe a reconnect) the performance gets better.
I don't know if this is related to the EC2 virtual machine hosting approach where loads are dynamically allocated and shared but it makes a live application not very reliable.
We have also an interesting issue, that the first stream that gets published behaves strange when it gets unpublished later.
Then all the subscribing clients get their unpublishing event about 20-30 seconds later (even when they all have a great connection performance).
Maybe that's all related to the big distance to the US server from Europe... or an expensive dedicated server is the only way to go.
But we currently don't know what we can expect when it comes to Wowza/Flash live performance.