Amazon calls the creation of AMIs “bundling”. In the Windows world, we would just say “cloning” or “imaging”. To bundle a new AMI, you have to first launch the Instance. Before you create an image, you will probably want to configure the operating system and install your software. If the Instance runs Windows, then bundling is quite easy but a bit longwinded. Initiating the bundling process amazon-aws-management-console-bundle-instance First you have to right-click on the Instance and navigate to “bundling”.

You will then have to specify an Amazon S3 Bucket Name and the Key Name. The Key Name is just the name of the image. S3 stands for Simple Storage Service. Don’t confuse S3 with EBS (Elastic Block Storage), which I mentioned in my last article. There are significant differences between these two storage services. Since S3 is a service that is independent of EC2, you have to sign up first and then create a so-called “bucket”. A bucket is basically just a folder that can be accessed via a URL. Unfortunately, S3 can’t be managed with the AWS Management Console. However, you can use the free Firefox add-on S3Fox to create a S3 bucket.

Amazon-aws-management-S3-fox EC2 has to shut down a Windows Instance before it can be bundled. This is a bit disappointing because technically it should be possible to copy a virtual machine while it is online. However, it is not necessary to shut down Linux Instances for bundling. Bundling is useful if you want to test modifications before the server goes live. But with Amazon’s bundling technology, you always have to take a productive Windows server offline before you can create a copy of its current state.

Unfortunately, EC2 doesn’t support Instance snapshots, so you can’t save the state of a server quickly before modifying the system. Some documentations refer to the bundling of EC2 Instances as snapshot creation. With “snapshot” however, something different is usually meant in virtualization solutions. A snapshot is not a copy of a virtual machine; rather, it saves the state of a VM by logging all changes after the snapshot creation. This not only saves disk space, it is also faster than cloning the complete machine.

Source: http://4sysops.com/archives/amazon-ec2-aws-management-console-bundling-amis/