Simplicity said:
Instancing is similar to WoW, but there are fewer instances as far as I can tell. BUT, those instances are typically used to further the plot of the game. So, the main storyline quest has a number of instances in it... Other than that, I haven't seen too many of them yet.
It has one significant and in my opinion great difference.. namely that the instances are not places that the best stuff in the game can only be obtained from. In LOTRO the best gear can be found by anyone of an appropriate level out of instance.. it is not tied to specific locations. So solo players dont miss out, nor do we get instance campers.
Ive been playing since the start of the beta more or less, and the only disappointments with LOTRO so far have been
1. Lack of Elven specific armours on vendors once out of the introduction (thier literally arent any until Rivendell, which is a fair way off in distance and levels), so the only elven armours you can get must be found, which can mean them turning up in a miss match of colours if at all.
2. The lack of Dresses (they are in the game on the npcs' just not purchaseable by players...grrrr)
3. Lag... (inevitable sadly right now as its uber popular so the servers are mobbed, game was a lot less laggish in the beta though some places like Gondamon and Bree are just painful to be around).
4. Crafters not being able to make cloaks, low-mid level racial armours beyodn humans style (game is definitely a little too human-accentric)
5. That they didnt switch back to single full color cloaks like they promised instead of the two part ones.
and thats it...fairly short list, beyond these little niggles the game is spot on and gorgeous.