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"Instances booted from Amazon EBS volumes can be stopped and later restarted, preserving any of the state that is saved to your volume and allowing you to modify some properties of your instances while it is stopped. For example, you can change your instance size or update the kernel it is using, or attach your root partition to a different running instance, making it easier to do debugging when you are creating new boot images. When booting from an Amazon EBS volume, AMIs and root partitions are no longer limited to 10GB, but can be up to 1TB in size, enabling significantly more complex images."
Amazon EC2 Instances Now Can Boot from Amazon EBS. Excellent news! Amazon’s web services just keep getting better and cheaper.