single DNN instance needs less storage on file Server and in memory as also only one database. User list is shared, i.e. same username can only be used once or user needs to use same password to be able to access multiple of the sites.

separate instances allow separate backup and restore, installation of modules without affecting the other installations and completely independant user list.

HTH

Everything what Mitchel and leupold told is correct but one aspect failed - the affort in updates e.s. when you're running your server commercial. When you've one installation running you only have to care one modification (update, backup, new modules, ...). When you've multiple installation you could have much more problems when you do a modification on your system. When you need multiple installations (when a customer insists an own installation) try to produce identical installations (clones), so it's then very easier to handle that demand.