Well, for best results, you would need a combination of questing/grinding depending on where you are in the leveling process. Im not too familiar with the game anymore, but if you have a gather quest that is a whole lot of an item that doesn't drop all that much, or the respawn rate is low, then its not worth it to gather the 100x2 items needed.

On the other hand, if it is something that drops pretty good, and the respawn isn't all that bad, then it may do you some good to grind that one out for both the kill xp and the turn in once you have all your items.

As far as instances go, I loved them and would run them as much as I could, but thats just me, not too sure how it would work out dual-boxing since I didn't know about that back in the day when I did play WoW. I think that as long as you have good support from people going in with you, and they understand what you are doing, then it should be pretty fun, and good for leveling/equipment too