To see this in action, play a video with chrome://media-internals/ open.
A video served from S3 will get saved to the media cache, and the full video can buffer when paused. A video served from cloudfront will only buffer a few seconds of video.
Update:
It is probably just easier to see for yourself:
Here is a video served from S3. Pause the video in chrome, and you will see the whole video gets buffered:
http://s3.amazonaws.com/jctest20080526/test/test.mp4
Here is the same video served from Cloudfront. Start the video, and pause it, and notice how it doesn't buffer more than a few seconds:
Do you know of any workarounds client-side?
I don't think there is one. You can't even compile a custom Chromium because it doesn't have h264 codecs. I even spend a day reading the Chrome source code, hoping there was some combination of headers that could trick Chrome into using the media cache, but I didn't find anything. I probably should have just spent the day finding a better CDN.
I'm not a big fan of Akamai's control panel -- setting up new distributions is way to complicated (albeit more flexible), and configuration changes were taking almost a day to propogate.
Amazon promised a fix, but then back tracked. Their explanation was something along the lines of "an old version of Squid has the same problem, thus it is okay". I cannot comprehend the logic system they employ to think that is a good reason to live with the bug.
