> "You get about 16MB of persistent info that will stick with your instance"

This is inaccurate. While bundling an image, you can specify its size (max 10GB), http://docs.amazonwebservices.com/AWSEC2/2008-02-01/Develope.... The unused space is the free space in the root file system.

It's a very bad idea to keep only 16MB free - it does fill up pretty quickly.