Instancing lets you create mass duplication of objects in a scene, with very little overhead. Previously, you would simply run out of memory. Now, with the ability to have huge 'virtual' polygon counts, artists can populate their scenes with incredible detail, and yet retain reasonable render times.
While instances can be thought of as clones of the original source objects, they don't need to look identical. They can be randomly scaled, positioned, rotated and even surfaced completely different from the source. This means you can use instancing for any number of uses.
