This bug was fixed in the package cloud-init - 0.6.3~bzr497-0ubuntu1

---------------
cloud-init (0.6.3~bzr497-0ubuntu1) precise; urgency=low

  * New upstream snapshot.
    - cloud-config support for configuring apt-proxy
    - selection of local mirror based on presense of 'ubuntu-mirror' dns
      entry in local domain. (LP: #897688)
    - DataSourceEc2: more resilliant to slow metadata service (LP: #894279)
    - close stdin in all programs launched by cloud-init (LP: #903993)
    - revert management of /etc/hosts to 0.6.1 style (LP: #890501, LP: #871966)
    - write full ssh keys to console for easy machine consumption (LP: #893400)
    - put INSTANCE_ID environment variable in bootcmd scripts
    - add 'cloud-init-per' script for easily running things with a given freq
      (this replaced cloud-init-run-module)
    - support configuration of landscape-client via cloud-config (LP: #857366)
    - part-handlers now get base64 decoded content rather than 2xbase64 encoded
      in the payload parameter. (LP: #874342)
 -- Scott Moser <smo...@ubuntu.com>   Thu, 22 Dec 2011 04:07:38 -0500

** Changed in: cloud-init (Ubuntu)
       Status: Confirmed => Fix Released

** Branch linked: lp:ubuntu/cloud-init

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https://bugs.launchpad.net/bugs/890501

Title:
  EC2 cloud-init overwrites 127.0.1.1 in /etc/hosts on every reboot

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