You will see a huge jump in performance by just upgrading from a micro instance. Micro instances use a burstable CPU profile, you will be running at very low performance for much of that import.
There are a number of things you can do to optimize inserts. Committing as much as you can in a single transaction (InnoDB tables) or disabling index updates (MyISAM tables) can "group" work together in a more efficient manor.
At some point with updating large volumes of data, you will hit the limits of I/O. With EC2 you may want to test RAID configurations or provisioned I/O to see how you can best improve performance.