Here is the general/high level information on dedicated instances:
Dedicated instances look like any other instance in the AWS Console. You create a dedicated instance using the console and the only two things you need to do:
- Launch within a VPC (dedicated instances can only run in a VPC).
- Select the tenancy as 'dedicated'.
You can move instances between dedicated and 'regular AWS' and 'regular AWS' and dedicated by snapshotting just like you would do with 'regular AWS' instances.
More on the recent price reduction: