Nick Gammon said:
One approach would be to assign an instance number to each player (with 0 being "no instance") and then if you are in a room only show other players who have the same instance number. You would also need to only show items on the ground with the same instance number. And mobs. And when you repop mobs you would need to check which instance a dead mob is in. And then when you say or emote, it should only be seen by players in the same instance.
And that system doesn't allow for how to know you have left the instanced part and gone back to the non-instanced part (maybe for repairs) and then go back into the instanced part.
That seems like a good way to tackle instances although imagine if 10 people hit and instance separately, that would mean your popping 10 instances of each mob that may have complicated mprogs attached to them. As the player base grows and the usage of instances do, so would the game cpu/memory requirements would could be a problem down the line.
This actually may be possible with a lot of thought and careful planning.