How do you secure Amazon EC2 instances running within my VPC?

Amazon EC2 security groups can be used to help secure instances within an Amazon VPC. Security groups in a VPC enable you to specify both inbound and outbound network traffic that is allowed to or from each Amazon EC2 instance. Traffic which is not explicitly allowed to or from an instance is automatically denied.

In addition to security groups, network traffic entering and exiting each subnet can be allowed or denied via network Access Control Lists (ACLs).