Amazon.com just announced that one can host static web sites in a S3 bucket. I went to their setup page at http://docs.amazonwebservices.com/AmazonS3/latest/dev/index.html?W
Make sure that you follow the S3 DNS bucket naming conventions when creating your bucket.
Then:
Enable S3 Website support for the bucket using the AWS Management Console at Properties --> Website
Make sure the files in the bucket have public read permissions
Try the website using the endpoint listed in the Management Console
Setup your CNAME using the listed endpoint (e.g. www.example.com CNAME www.example.com.s3-website-us-east-1.amazonaws.com)