I would suggest no more then 2 per machine. In you own words its a resource hog. Currenty I run a 2.4 quad core overclocked to 3.0 and 4 gigs of ram and I still glitch. Thats even with 2 different directories. Lotro is very texture intesive and unless you have an Extreme Intel CPU I would stick to 2 instances per machine. Innerspace does have the ability to clone machines just as keyclone does. I have used keyclone as well to run 2 instances, 1 per machine.
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