How much is the initial setup cost for operating 1 XMR node? Ongoing annual costs?
Is it possible to set this up on AWS?
You could probably do it not only on AWS but on a very cheap (free tier) AWS instance or any number of cheap VPS providers. Syncing may be a problem especially on the latter due to high CPU load but if you sync once elsewhere and transfer the database it should be fine,
Or just run one at home, either on your regular computer or an old laptop. Unlike masternodes, XMR nodes do not require a static IP nor particularly high bandwidth at this point (in the future if and when things scale up that's a different story but for now it is easy).
If you are very price sensitive, an old PC or laptop is the way to go. That costs nothing except your time.
You may use Netlimiter or similar to shape traffic and keep your bandwidth available for normal use.
http://alternativeto.net/software/netlimiter/If you can afford $60/year, I had great luck on Vultr (they even let you mine!). They have colos all over the world.
With this fund matching deal, the cost drops to $30/year.
https://www.vultr.com/match/If you want to spend a little more and support the network (for The Greater Good), find a region with tons of potential users but few if any XMR nodes.
Right now, my top pick for bang/buck in terms of new users served is India, which has good internal bandwidth but limited external connectivity.
If you have any specialized regional/language skills, use them to figure out a good spot for our next full node.
If you have extra money, setting up a DDOS-protected high-availability node on koddos.net or behind a Cloudflare-type CDN (Mediatemple's and Rackspace's are top notch) makes a great contribution to the network's resiliency.