What are instances?
What are the instances that are affected by instancing optimization in the settings? From other threads I understand that one should leave it on speed unless you run out of memory, then change it to memory. I would like to know what is considered an instance. Is it every object in the scene, such as hair, pants, victoria etc. Does it include cameras, "bones", materials, lights, targets, groupings etc?

Comments
Instances are a special type of object that you can use when you need copies of one item from your scene: for example if you want to make a forest you could create a base tree and then lots of instances of it to cover your forest ground.
Instances are exact copies of the base object, only their place is different, so DS only needs to know how load the base one and where to put copies. That means it can save a lot of memory by only loading the geometry and textures once.
I wondered about that. So if I manually create a scene by loading a chair, table, and a figure, I wouldn't have instances. So then the instancing optimization in the settings would have no effect at all on that scene. Does that seem correct?
Yes, that's correct, in your example you wouldn't have instances so the setting wouldn't matter.
It will be important for scenes like this one, for example.
That's a relief. Now, I can stop fiddling with that button everytime I run out of VRAM.