Compute units are the amount of CPU that is allocated to a particular instance.  These measurements can be used as a normalizing factor across CPU's.

In reference to Compute Units, Amazon states: 

"Transitioning to a utility computing model fundamentally changes how developers have been trained to think about CPU resources.  Instead of purchasing or leasing a particular processor to use for several months or years, you are renting capacity by the hour.  Because Amazon EC2 is built on commodity hardware, over time there may be several different types of physical hardware underlying EC2 instances. Our goal is to provide a consistent amount of CPU capacity no matter what the actual underlying hardware.
Amazon EC2 uses a variety of measures to provide each instance with a consistent and predictable amount of CPU capacity.  In order to make it easy for developers to compare CPU capacity between different instance types, we have defined an Amazon EC2 Compute Unit.  The amount of CPU that is allocated to a particular instance is expressed in terms of these EC2 Compute Units.  We use several benchmarks and tests to manage the consistency and predictability of the performance from an EC2 Compute Unit.  The EC2 Compute Unit (ECU) provides the relative measure of the integer processing power of an Amazon EC2 instance.  Over time, we may add or substitute measures that go into the definition of an EC2 Compute Unit, if we find metrics that will give you a clearer picture of compute capacity."