Here's some additional info from Amazon.com:
Clicking the "Test drive now" button launches a copy of this app on Amazon Elastic Compute Cloud (EC2), an Amazon Web Service available to developers. When you click on the simulated phone using your mouse, those inputs are sent over the Internet to the app running on an Amazon server -- just like a finger tap is sent to the app on your mobile device. From the server, the video and audio output from the app are sent back to your computer. All this happens in real time, creating the effect that you're running the app locally on your computer.That's a lot better than simply playing with some Flash app that needs to be customized for each Android app. You can even take the phone and rotate its orientation during the test drive procedure, too.
Naturally, you can't get the full experience no multi-touch, and there seems to be no way to test out Android fragmentation on the emulator through the use of older versions of software or specific loads for each device. Indeed, Android users have all seen how an app might work wonderfully on one device, and then totally suck on a different one, even running the same OS version.
Considering there's no refund policy listed at the Amazon Appstore, and that even the Android Market only has 15 minutes of refund time (since it was reduced), this is a great idea, fragmentation or no fragmentation.
Now, if AT&T could just fix that "no sideloading" problem that they brought upon themselves, all would be well with the Amazon Appstore (except, of course, for that Apple lawsuit).