I'm trying to decide on the frequency of making snapshots. Is the AWS system designed in such a way that taking snapshots has a negligible effect on the performance of the volume, or can it significantly reduce the performance due to presumably massive read requests from the underlying physical device?
While the snapshot is in progress it is possible you will notice performance degradation. As far as I know it is typically recommended by Amazon for customers stop doing read/writes (especially database read/writes) to a volume while it is being snapshotted to ensure data consistence. So I would recommend you not to abuse it. I am doing snapshots twice a day for my instances. As 12 hours span is okay to lose for me some data on DB or on FS if something goes wrong.