At PDC10, Microsoft announced a private beta program for the 'Extra Small' Windows Azure Instance. This smaller instance provides developers with a cost-effective training and development environment. Developers can also use the 'Extra Small' instance to prototype cloud solutions at a lower cost.
Since that time, due to a lot of interest in the 'Extra Small' instance, Microsoft announce that all customers can now use the beta version of the Windows Azure Extra Small Instance.
To learn how to configure your application to start using Extra Small Windows Azure instances, please refer to this MSDN Library article.
To see a pricing and resource comparison of instance sizes,here.