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> I think you run RDS on an EC2 instance, so it’s basically just a normal virtual server running Amazon’s managed version of the RDBMS

Yes I think that's right. That is to say, it doesn't give you replication.

> I’m not sure what happens if an instance “fails” but I assume you can have downtime if Amazon needs to move your VM, just like EC2, but I assume Amazon handles moving the instance and restarting it.

No need for the quotation marks, that's the correct terminology. Your suspicions seem to be right on - it looks like RDS handles instance-failure for you, with non-trivial downtime, but no data-loss. [0]

https://aws.amazon.com/blogs/database/amazon-rds-under-the-h...




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