Seen loads of good posts about EBS describing how to use them to provide cross instance persistent storage. Really it's awesome. All the EC2 images store to their own EBS and if the EC2 crashes a new one can be resumed with minimal downtime. Amazon has nice pictures about this use case.
Quite simple to increase the size of an EBS volume, just: create, attach, mount, write, umount, snapshot, create, attach, check, resize, check, mount, delete. We're going to walk through the process using Amazon EC2 command line tools.