What Elsegundo said.

And yes, it is highly likely that if you 5-box you can do instances by yourself and obviously get gear. I wouldn't consider it a time saver though unless you're overgeared or higher level than what the instance was designed for.

Personally, I wouldn't do less than 5 if you want to focus on instances (unless you have some solid friends that are available as a fifth). I started out with dual boxing, primarily so I would have a choice of class to play. Then RAF came out and the rest is history for me.

As for quests, multiboxing doesn't really help that much [and may be worse]. Some quests you have to get a partner or group for, but you don't NEED to do them. I solo'd my non-MB characters up and geared them with quest loot, Battleground PVP gear and crafted stuff . I had serious problems trying to do some of the G3+ based quests in BC and never actually ended up doing them - they are still in my quest log (I started back into WoW 1 year after BC was released, so people were focused primarily on raiding). So, you definitely don't need to multibox to get good loot. With WoTLK I don't know if this will hold true or not, however I believe there is still some good crafted gear.

As for your second question, do a search on BOOSTING (this was termed powerlevelling in EQ, but that term is more associated with paid boosting through a service in WoW). I believe (never did this before) that a high level just kills everything in a lower level instance with the person being boosted in the group. Nothing magic about it. You don't get a lot XP per kill, but you kill ALOT. I believe this is how it's done anyway, I may be wrong. Alternatively, the BOOSTEE tags a mob and the BOOSTER kills it. This approach would probably be more useful at higher levels. I believe this is how the first 80 reached 80 so fast.