Amazon EC2 allows you to set up and configure everything about your instances from your operatingsystem up to your applications. An Amazon Machine Image (AMI) is simply a packaged-upenvironment that includes all the necessary bits to set up and boot your instance.
M1 and M3 Standard instances have the same ratio of CPU and memory, some reasons below as towhy you would use one over the other.
M3 instances provide better, more consistent performance that M1 instances for most use-cases.
M3 instances also offer SSD-based instance storage that delivers higher I/O performance. M3instances are also less expensive than M1 instances. Due to these reasons, we recommend M3 forapplications that require general purpose instances with a balance of compute, memory, andnetwork resources.
However, if you need more disk storage than what is provided in M3 instances, you may still find M1instances useful for running your applications.
Reference:
https://aws.amazon.com/ec2/faqs/