Adding additional storage to your Amazon EC2 instance have several advantages. You can select the right storage type for the use. Why use a fast SSD backed volume for storing nightly backups instead of magnetic storage, that ar slower but come at a much lower price.
First you need to provision storage and assign it to your instance. Amazon provides a good guide on how to add additional volumes to your instances. There are several advantages to using several different volumes. As I wrote in my guide to move mysql storage you will not risk running the boot disk full witch will make the system halt. Other advantages include the selection of storage fit for your purpose and price range, as mentioned above. External volumes can also easily be migrated between instances if and when you get a need for that. It is also easier when you need to extend your storage space. Instead of making a snapshot of the entire instance and then launching a new one with a bigger drive you can attach new storage and migrate the data. This approach will make the downtime much shorter.
When selecting the correct storage for you solution there are a few things to keep in mind. When it comes to EBS it comes in three basic flavors. All with there benefits and disadvantages, it is there for important to make an educated decision.