The way it works is that you read the RAM pages from one machine to another in real time and when the RAM cache is almost synchronized you slam the IP address over to the new box (and then you let Amazon reboot your old box and then migrate back post-upgrade if you want to).
You can try it out on our public cloud at terminal.com if you'd like to (we auto-migrate all of our customers off of the degrading hardware before it reboots on our public cloud, but you can control that if you're running terminal as your infrastructure).