If you have many models animating and you want them all to be posed to exactly the same frame, yes, instances can help there. That’s the situation described in the manual, but it’s obviously a pretty contrived situation. Maybe you’ve got a crowd scene, though, and you’ve got hundreds of models walking around, each on one of five or six different frames at the same time. That wouldn’t be so bad.
The main reason we’ve ever found to use instancing is when you want the kind of weird shared behavior it gives you. For instance, in Toontown, there are scenes where a Toon takes out a pie and holds it in his hand in preparation to throw it. This means that we need to load a pie model and parent it to the Toon’s right hand node. The complication is that each Toon has three levels of detail, which means each Toon has three different right hand nodes. If we parented the pie only to the topmost level of detail, then when you took a few steps back, the pie would disappear–so we really need to parent three different pies to three different right hand nodes. That’s a nuisance to keep track of. Instead, we have just one node, which is instanced to each of the three different hand nodes, and we parent one pie to that node instead. That implicitly creates three instances of the pie with one operation.
As you can see, you have to work pretty hard to find a situation in which instancing actually helps you.
David