Hi!
Very simple explanation first:
An instance can be seen as a separate zope server, or site. You can have many instance, and each runs independently of the others. All instances will run as different server processes, and they need to have different ports (http, ftp, etc). Read more on zope.org.
To create an instance, run this command:
, it should be available if you installed zope. The script will ask you some questions about where to create the instance root etc and copy the zope skeleton.
A good place for an instance is /var/zope/{sitename} or something like this.
Finally, you might need to configure init.d script/settings and add the path to your instances there - I'm not sure how this works in different distributions.