Each drive is mounted as a different device.
Using a Windows analogy, C: would be the Amazon EBS boot disk, while D: would be Instance Store. You choose the device-type by choosing which drive/mount point you want to use.

In the days before Amazon EBS, the EC2 instances would boot from Instance Store. This meant it was not possible to 'Stop' the instance, since it would lose the boot disk. These days, instances boot from EBS volumes. However, any data kept on Instance Store will be lost when the instance is Stopped. It is great for temporary storage, caches or where the data is available elsewhere (eg can be reloaded from S3).