EC2 private key file has extension .pem , which cannot be used by PuTTY. So we have to convert .pem to .ppk format which PuTTY accepts.  Listing the steps below to do it,

• Download PuTTYgen -  http://the.earth.li/~sgtatham/putty/latest/x86/puttygen.exe

• Launch PuTTYgen, Using the ‘Import’ command from the ‘Conversions’ menu, load the .pem file of EC2 and press  ’Save Private Key button’. Ignore warning about leaving the passphrase blank.  The file will be saved with .ppk extension

• Now launch PuTTY, go to SSH panel, ‘Private key file for authentication’ load the .ppk file, and now you can use PuTTY to connect to the EC2 instance.

References:

• http://clouddb.info/2009/05/17/a-quick-overview-of-putty-and-ssh-for-aws-newbies/
• http://the.earth.li/~sgtatham/putty/0.62/htmldoc/Chapter8.html#puttygen-conversions
• http://the.earth.li/~sgtatham/putty/0.62/htmldoc/Chapter4.html#config-ssh
• http://docs.amazonwebservices.com/AWSEC2/latest/GettingStartedGuide/LaunchInstance.html

Solution 1: NoMachine

Steps:

• Download NoMachine Linux server from here  http://www.nomachine.com/select-package.php?os=linux&id=1
• Follow installation instructions given here  http://www.nomachine.com/documents/server/install.php
• Download NoMachine windows client from here  http://www.nomachine.com/download-package.php?Prod_Id=3655
• Follow installation instructions given here  http://www.nomachine.com/documents/client/install.php

Solution 2: Xming

Steps:

• Install PuTTY http://www.chiark.greenend.org.uk/~sgtatham/putty/download.html
• Follow steps in this site to install Xming and to set it up to make it work together with PuTTY http://rcc.its.psu.edu/user_guides/remote_display/xming/
• Install additional fonts package for Xming http://sourceforge.net/projects/xming/files/
• Follow steps given in below link to increase the font sizes displayed in GUI through Xming http://aufather.wordpress.com/2010/11/21/increasing-font-size-in-xming-server/

Problem: Graphical programs are very slow.

Solution:  Enabling “SSH compression” might help if you use a low bandwidth connection. The option is under Connection > SSH in the left menu of PuTTY. ( http://doc.es.aau.dk/it_services/software/windows/putty_and_xming/)

Conclusion:

I am using  NoMachine, as Xming(6.9.0.31) was slow even after using SSH compression. And the latest version of Xming(7.5.0.45), which possibly has fixes for slow GUI ( http://www.straightrunning.com/XmingNotes/) was not  available for free.