The 850 GB storage is ephemeral - it does not persist once the instance is stopped/terminated; you do not incur any charge for it (neither for I/O nor provisioned storage). For the m1.large, the two volumes usually show up as
/dev/xvdc. For instances that have an EBS root, ephemeral storage is only added if explicitly included (i.e. with
--block-device-mapping) in either the AMI (
ec2-register) or the launch command (
ec2-run-instances). If an instance does not have the added storage, it cannot be added to it (without launching a new instance).
Of the commands mentioned in the article, all those beginning with ec2-* (i.e. the api tools) can be run from anywhere (e.g. your windows machine, or another instance, or the instance in question). While the others need to be run on the instance itself (via SSH).
Instead of using the API tools, you can use the AWS console to perform the same tasks (stop, detach, snapshot, create EBS volume, attach) - but you will need to perform the resize2fs directly on the instance itself.
It is worth noting that by default, most root EBS volumes are not set to persist after termination of the instance (while any EBS volumes you manually attach will persist by default). You can change this behaviour by using:
ec2-modify-instance-attribute INSTANCE_ID -b "MOUNT_POINT=VOLUME_ID:false" (the 'false' specifies not to delete on termination). You can determine whether or not an EBS volume will be deleted on termination with
ec2-describe-instance-attribute INSTANCE_ID -v -b (or by using the AWS console).
For as long as your EBS volume exists, all the data on it persists. If an instance 'goes bad' (presuming it is not a problem with your setup), and the EBS volume still exists, you can attach it to another instance, either as the root volume, or as an additional volume, and it should function without issue. It is advisable, however, that you have some snapshots of your EBS volumes (they aren't above failure), and that you separate your data from the software (i.e. use multiple EBS volumes).
To place your important data on an EBS volume (presumably you already have it on the root volume), you can attach a second EBS volume, and mount -o bind the locations from your root volume to your additional volume. Despite an instance-store root volume being available, using an EBS root is preferable in terms of portability and ability to recover.