dx11 skined instance mesh and texture buffer

I have a looked at http://developer.download.nvidia.com/SDK/10/direct3d/Source/SkinnedInstancing/doc/SkinnedInstancingWhitePaper.pdf

His solution is encoding each FinalBoneMatrix of a bone  into 4 pixels of a texture2D.

But if the bone matrices store in animation data are reference to parent,  should I bake every frames FinalBoneMatrix of bones and store into the texture ?

Or Is there any texture buffer like cbuffer that can replace the IMMUTABLE texture ?

Instance data stored in cbuffer or vertexbuffer ? If it's stored in vertexbuffer, I need to make a new vertex input layout.

While if I use cbuffer to store instance data, it will convenient for me to use SV_instanceID to look for instance data.

I see his dx10 demo using cbuffer to store instance data.