Install

$ apt-get install -y libxslt-dev libxml2-dev
$ gem install knife-ec2
$ gem install net-ssh-multi

Get Your AWS Keys

Login to your AWS account at aws.amazon.com
Go to My Account/Console -> Security Credentials

Scroll Down to The Certificates and Secret Keys Menu and generate your new access keys as needed

Generate the Keypair associated with your new ec2 instances ( for ssh )

Create a new keypair. This should result in a pem file output to you. If you lose this file you will not be able to access any ec2 instances associated with it unless you have alternate accounts you can login with.

Configure

$ cd ~/.chef
$ vi knife.rb

Append the following to your knife.rb

### AWS Configuration ###

## The below lines allow you to use the ec2 api
knife[:aws_access_key_id] ='< AWS ACCESS KEY GOES HERE >'
knife[:aws_secret_access_key] ='< AWS SECRET KEY GOES HERE >'

## The below allow you to ssh into new ec2 instance that are associated with the keypair below
## You can alternately choose to specify the username and key location on the knife command line
# knife[:aws_ssh_key_id] ='james-aws'
# knife[:identity_file] ="/home/james/.ssh/james-aws.pem"

Test knife-ec2 command

bootstrap file squeeze.rb can be grabbed from here:
https://github.com/cookingclouds/bootstrap/

$ knife ec2 server list
$ knife ec2 server create -I ami-e00df089 -f t1.micro -Z us-east-1a -G "default_security" -k james-aws --ssh-key /home/james/.ssh/james-aws.pem --template-file /home/james/bootstrap/squeeze.rb

knife-ec2 command reference list

knife ec2 server create --help
knife ec2 server create (options)
    -Z, --availability-zone ZONE     The Availability Zone
    -A, --aws-access-key-id KEY      Your AWS Access Key ID
    -K SECRET,                       Your AWS API Secret Access Key
        --aws-secret-access-key
        --user-data USER_DATA_FILE   The EC2 User Data file to provision the instance with
        --bootstrap-version VERSION  The version of Chef to install
    -N, --node-name NAME             The Chef node name for your new node
        --server-url URL             Chef Server URL
    -k, --key KEY                    API Client Key
        --color                      Use colored output
    -c, --config CONFIG              The configuration file to use
        --defaults                   Accept default values for all questions
    -d, --distro DISTRO              Bootstrap a distro using a template
        --ebs-no-delete-on-term      Do not delete EBS volumn on instance termination
        --ebs-size SIZE              The size of the EBS volume in GB, for EBS-backed instances
    -e, --editor EDITOR              Set the editor to use for interactive commands
    -E, --environment ENVIRONMENT    Set the Chef environment
    -f, --flavor FLAVOR              The flavor of server (m1.small, m1.medium, etc)
    -F, --format FORMAT              Which format to use for output
    -i IDENTITY_FILE,                The SSH identity file used for authentication
        --identity-file
    -I, --image IMAGE                The AMI for the server
        --no-color                   Don't use colors in the output
    -n, --no-editor                  Do not open EDITOR, just accept the data as is
        --no-host-key-verify         Disable host key verification
    -u, --user USER                  API Client Username
        --prerelease                 Install the pre-release chef gems
        --print-after                Show the data after a destructive operation
        --region REGION              Your AWS region
    -r, --run-list RUN_LIST          Comma separated list of roles/recipes to apply
    -G, --groups X,Y,Z               The security groups for this server
    -S, --ssh-key KEY                The AWS SSH key id
    -P, --ssh-password PASSWORD      The ssh password
    -x, --ssh-user USERNAME          The ssh username
    -s, --subnet SUBNET-ID           create node in this Virtual Private Cloud Subnet ID (implies VPC mode)
        --template-file TEMPLATE     Full path to location of template to use
    -V, --verbose                    More verbose output. Use twice for max verbosity
    -v, --version                    Show chef version
    -y, --yes                        Say yes to all prompts for confirmation
    -h, --help                       Show this message