I have configured an RDS Postgres micro instance for testing but am having problem connecting. I have created a security group and allow all hosts (0.0.0.0/0) by default to
Step 4 of the RDS setup wizard ("Additional Config") lets you select whether the DB is Publicly Accessible or not (if it's not, access is limited to within your VPC, regardless of your security group settings). I'd imagine that determines whether the hostname resolves to 54.* vs 172.* .
Your first instance may have been set to private - as far as I can tell this can't be changed after initialization. I had a similar issue and creating a new instance set to be publicly accessible solved it for me.