Well welcome back!
Well an instance (in WoW) is anything that you and a group of people can go into and have your own copy of. Generally when people say "instance" though, it's a 5 man. a Raid though can be a 10, 25, or 40 man. You won't find any lvl 70 40 man raids, but you will see 2 10 mans and 7 25 mans, not including instances. You have to have pretty good gear for those.
As for your armory, I would replace the neck, bracers, belt, and second trinket ASAP. For doing the first raid (karazhan, 10 man) you should probably have at least 700 spell damage.
Making money... I would suggest going to the new island and doing the daily's. You can make a couple hundred gold there in just an hour or two if you know what you're doing. There are something like 10 quests there (that you can do each day...hence the tite "daily") that give around 8-12g (gold) each for completing them, plus you can get rep with the faction there for some pretty awesome items.
Hope this helped, welcome back, and GL
Edited, Jun 9th 2008 7:07pm by Degortuna