Rackspace has announced the general availability of "Auto Scaling" technology for its public cloud, catching up with Amazon which implemented the tech in 2009. Auto Scaling is a crucial component of any cloud, as it allows new resources to be allocated to live virtualized servers in real-time in response to demand, and without …
"allows new resources to be allocated to live virtualized servers in real-time in response to demand, and without the need for a shutdown"
AWS auto scaling allows additional instances to be launched based on various triggers - it does not, as the article suggests, allow individual instances to have additional compute (CPU or RAM) added.
Would be a great feature if available, but certainly it is not offered by Amazon.
You can relaunch an image as a different size, but this does need a reboot.