When I attempt to use LXC on AWS EC2, following the same official SUSE instructions that work for me on a local machine, it appears that zypper is removing the SLES11 cloud repositories. The removal happens without error message as soon as the LXC template tries to install the base rpm package.
Details can be found here in the AWS forums:
Is this a licensing policy decided by SUSE or Amazon to prevent customer running LXC containers of SLES on EC2? Or is this a technical problem?