won't reboot

Ubuntu image won't reboot if running on t1.micro Amazon EC2

Due to a now resolved bug, if you start/stop or reboot an pre-2010-09-09 official ubuntu image running on t1.micro Amazon instance, you would end up with a ec2-brick.
That is, the system would hang on reboot and you would be stuck out of your image with no luck.
The problem was caused by /etc/fstab referring to a partition that is usually available on all other instance types, but not in t1.micro.
These are the steps to follow to fix the problem:

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