What actually is Amazon EC2's 'pay per hour' for on demand instances?

What actually is Amazon EC2's 'pay per hour' for on demand instances?

I'm thinking to host my ROR website on Amazon EC2. I wont be needing a S3
as of now.
But when I check the their pricing it's like
Micro - $0.020 per Hour
I don't get this per hour billing.My site will be live for 24x7. So it
will be live for all hours in a day. So what's the benefit of such pay per
hour?
Help me understand this.