My boss tells me to install 2 SQL instances on each node. This means 8 instances on 4 nodes.
His reasons: a) Rather than 1 instance with databases having both high and low transactions, better to split into 2 instances, 1 with high usage databases, and the other with lower usage databases. CPU and memory utilisation is better this way.
b) Each instance will have less databases, therefore if a server is overloaded. Moving just 1 instance out may solve the problem.

I have read in the SQL Server 2000 Failover Clustering White Paper that "it is not recommended to have more than 1 instance on a node" (pg 30).

Hi
you mentioned that "on a 2 node server, that is 4 instances, so you can really only allocate 1/4 of the memory t
each to the active 2 instances on the server)...."
I do not understand why the 2 active instances will get only 1/4 of the node's memory. These active instances are OS process, therefore they should be allowed to grab whatever memory they needed until the OS decides enough is enough. So I don't see why for a server with 8GB RAM, each of these 2 active instances cannot get at least, say 3GB each? TIA for your explanation 8-