I'm trying to understand why when launching a new instance Amazon defaults to EBS (8gb root) instead of instance storage. Why do they sell instance storage then if it's not used also to boot the base system?
Is it safe to uncheck delete on termination, make it bigger (~50GiB) and keep all files on that EBS instead of creating a new one to make sure data will persist and it will also be usable by another instance?
EBS storage is persistent, the data will be kept even if you shutdown/terminate the instance. The local storage is not and the data is only kept whilst the instance is alive.
If you want to keep the data stored on EBS after the instance is terminated you should uncheck Delete on termination.
It is safe to change the size of an EBS, I believe it must be shutdown to make the change.
You can attach and detach an EBS drive from instances, so yes, you can move it between instances but it can only be attached to 1 instance at a time.
I think the main question is that you have too few space on your EBS drive available. There are two ways to resolve this:
You can change the size of your root disk (provided it is an EBS backed instance) as described here: http://alestic.com/2010/02/ec2-resize-running-ebs-root I would suggest to test this on a throw-away instance first however...
The best (and easier) option is to give the desired space on instance launch - see the --block-device parameter on the launch call: http://docs.amazonwebservices.com/AWSEC2/latest/CommandLineReference/ApiReference-cmd-RunInstances.html
