I think ec2-bundle-instance does something much like what you're asking for. EC2 VMs are not mounted read-only. They are reconstructed from S3 and mounted rea

I think ec2-bundle-instance does something much like what you're asking for. EC2 VMs are not mounted read-only. They are reconstructed from S3 and mounted read/write as a local file on the Xen node. The changes to this file (your instance's storage) are saved across reboots when you type 'reboot' or use the external ec2-reboot-instances command. It's just that the terminate operation does not copy the changed file back to replace the AMI that was launched (it would be quite limiting if it did that). ec2-bundle-instance is a program that will bundle a running instance into a new AMI upon its next reboot. So it requires a reboot and is not like a live lvm-snapshot which is what you will get from EBS snapshots.