Amazon S3 is short for Amazon Simple Storage Service, and it is the storage in the cloud. While it can be used to store anything, it's best to think of as optimized for files (documents, images, etc) that you may need quick, easy access to from the cloud.
Amazon S3 is a good choice for the following:
Storage durability is measured as a percentage and Amazon S3 weighs in at an incredible 99.999999999% (that's eleven 9s) of data durability. That kind of reliability is kind of mind blowing for folks who have been in the industry for a while, but I would say it has been born out in our experience over the past 8 years working with AWS.
Traffic between Amazon S3 and other Amazon services (like EC2) can leverage up to 100 Gbps of bandwidth when they are in the same Region.
How much does Amazon S3 cost? It's is priced at $0.023 (2.3 USA cents) per gigabyte per month. Even better you can get started with 5GB of standard S3 storage for 12 months. After 12 months that storage would cost you $1.38 per year.
While it's possible to store pretty much anything on S3, there are a few use cases it shouldn't be used for: