Best practices for application and database replication on amazon AWS?

DB-aha
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Currently we are running an application and a database on a single virtual machine using AWS. We are looking to expand to RDS for the database which seems like common sense we would have 2 different locations for the database for failover for when one goes down. However or the application, how should it be set up in case one fails? We would need the IPt o remain the same so the application does not break. Currently the app and the database reside on the same virual box on AWS so if the database fails, we would assume that the app would fail too in worst case scenario because the full server is down.   What would be the best case to make all of this work for failover both app and database in a sensible way while minimizing cost using AWS and or RDS. Thanks in advance.
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