James Egan should learn to read. The part about instances was in reference to the Death Knight starting area only. It in itself is a series of instances. No one else can go there, just new Death Knights. As you progress along the quest chain you are placed into new "instances" that reflect the respective changes indicated in the quest story. The only other people you can see during your Death Knight starting quests are other Death Knights of your own faction that are at the same level of progression. Once you have completed the entire quest chain, you are placed into the "regular" world with everyone else.

Traditional dungeons or "instances" still exist and still function in the same manner as they always have.