I am using AWS RDS for MySQL. When it comes to backup, I understand that Amazon provides two types of backup - automated backup and database (DB) snapshot. The difference is
From personal experience, I recommend doing both. I have the automated backup set to 8 days, and then I also have a script that will take a snapshot once per day and delete snapshots older than 7 days. The reason is because from what I understand, there are certain situations where you could not restore from the automated backup. For example, if you accidentally deleted your RDS instance and did not take a final snapshot, you would not be able to access the automated backups that were done. But it is also good to have the automated backups turned on because that will provide you the point-in-time restore.
Hope this helps.
EDIT
To answer your comment, I use a certain naming convention when my script creates the snapshots. Something like:
autosnap-instancename-2012-03-23
When it goes to do the cleanup, it retrieves all the snapshots, looks for that naming convention, parses the date, and deletes any older than a certain date.
I think you could also look at the snapshot creation date, but this is just how I ended up doing it.