I'm half way into registering a new domain address at AWS. The cost for a .com address is 12$ a year, but there's also a monthly 50$ "policy record" fee. That's way more than I pay for my whole service at one.com. Do I need this "policy record"? To my understanding, having read the manual, I do.

I want to setup a web server described in this thread: http://www.gamedev.net/topic/674296-mysqlphp-on-amazon-aws-or-alternative/

Route53 with policy records lets you do things like "when someone tries to resolve foodomain.com from Bulgaria, send them to the Paris data center, but when they are in Indonesia, send them to the Japanese data center" and such.

If you are just getting started, you don't need that.

You don't need a domain registered on AWS at all, and you don't necessarily need to use Route53. You can register it wherever, and then point that at your Amazon services (by IP, that you get from the AWS console, for example from an Amazon Elastic Load Balancer service.)

Once you have millions of users and use auto-scaling to spin up new instances on demand, and want to provide lower latencies to different users all around the world, you can come back to Route53 :-)