This is what AWS FAQ’s have to say on it:
The API tools serve as the client interface to the Amazon EC2 web service. Use these tools to register and launch instances, manipulate security groups, and more
The Amazon EC2 AMI Tools are command-line utilities to help bundle an Amazon Machine Image (AMI), create an AMI from an existing machine or installed volume, and upload a bundled AMI to Amazon S3.
So, use API tools if you want to manage instances, if you want to build and upload an AMI (Amazon Machine Image), use AMI tools