Second: how helpful is something like this really? Can you give some example use cases?
Here's an example of how we use it: We push original high resolution versions of photos/graphics to S3. Then to make a page with smaller, cropped thumbnails, it's as easy as calling for the image through Cloudfront with a special cdnimag.es url. (example integation: http://www.seewhatiwore.com/browse)
You'll notice with a site like Flickr, they generate five fixed sizes and they are locked into those sizes across their site. (example: http://www.flickr.com/photos/rappensuncle/183689226/sizes/l/...)
With cdnimag.es you can generate variations of the original image (sizes, crops, grayscale, reflection) on the fly without doing anything to the original. All this while still enjoying the caching and performance benefits of a CDN like Cloudfront.
