When you reboot a physical computer at your desk it is very similar to shutting down the system, and booting it back up. With Amazon EC2, rebooting an instance is much the same as with a local physical computer, but a stop/start differs in a few keys ways that may cause some problems and definitely have some benefits.
When you stop an EBS boot instance you are giving up the physical hardware that the server was running on and EC2 is free to start somebody else’s instance there.
Your EBS boot volume (and other attached EBS volumes) are still preserved, though they aren’t really tied to a physical or virtual server. They are just associated with an instance id that isn’t running anywhere.
When you start the instance again, EC2 picks some hardware to run it on, ties in the EBS volume(s) and boots it up again.
Things that change when you stop/start include: