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So from that I still read that it can only store and retrieve data. So even for the 'sophisticated web application', I'm guessing that it means that stuff like the DB, images etc are stored there and accessed through another web server. IE, you can't install apache etc on there. It is like I said above, more like a external hard drive, a container for you to expand your business.
For example, EC2 would allow for quicker access to the DB stored on S3 due to greater computing power, without needing to upgrade to a top of the line server, it scales computing power to what you need. And S3 allows for 'unlimited' space for applications like webmail etc.
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