When you launch an Amazon EC2 instance, the root device volume contains the image used to boot the instance. When Amazon introduced Amazon EC2, all AMIs were backed by Amazon EC2 instance store, which means the root device for an instance launched from the AMI is an instance store volume created from a template stored in Amazon S3. After Amazon introduced Amazon EBS, Amazon introduced AMIs that are backed by Amazon EBS. This means that the root device for an instance launched from the AMI is an Amazon EBS volume created from an Amazon EBS snapshot. You can choose between AMIs based by Amazon EC2 instance store and AMIs backed by Amazon EBS. Amazon recommend that you use AMIs backed by Amazon EBS, because they launch faster and use persistent storage.
Amazon Elastic Block Store (EBS) provides block level storage volumes for use with Amazon EC2 instances. Amazon EBS volumes are network-attached, and persist independently from the life of an instance. Amazon EBS provides highly available, highly reliable, predictable storage volumes that can be attached to a running Amazon EC2 instance and exposed as a device within the instance. Amazon EBS is particularly suited for applications that require a database, file system, or access to raw block level storage.