Hiya and welcome to WoW.
As a warlock you will be getting your own version of pets that help you out in gameplay. You will summon them and they help you kill monsters basically. Other pets can be bought in cities and at the Auction House or drop from monsters (i.e. Cats, Owls, Cockroaches). These are purely for show and just follow you around.
People with bats and bears, you probably saw a Hunter. THey have the ability to tame animals throughout the world and use them as their pets.
As far as instances go..the www.wowwiki.com definition is:
" Dungeons, keeps, or other confined areas can have sub-areas called Instance Dungeons", or just "Instances". These Instances are special areas in the World of Warcraft where your group or raid party is able to interact with a dungeon privately; that is, without interference from other parties.
Instance dungeons tend to feature the most difficult and rewarding content, both in terms of enemies and items, but also in terms of level design. Getting through an instance requires a well-trained and well-balanced group of players that are of an appropriate level for the challenge. "
I hope this is helpful. Definitely check out wowwiki.com and also www.thottbot.com for information. I use them all the time.
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