Advantages and disadvantages of multiple instances on a cluster

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Looking for advice rather than the solution to a specific question here.

I'm trying to make the case for creating a number of additional instances on
my company's existing 2-node active/passive SQL Server 2005 cluster.
Currently there is a single instance overloaded (to my mind anyway) with 92
databases (excluding the systems). (I'm sure I read somewhere that the
recommended limit was 25).

So I figured that I would recommend the creation of a number of additional
instances to host separately in-house databases, third-party databases,
SharePoint databases (we're adopting SP big-time at the moment) and a test
instance (currently databases are developed on a test server then moved to
the live cluster - would be useful to have a test instance on the live
cluster). Naturally, however, I'm being asked to justify that recommendation
in terms of increased efficiency both of my time as DBA and of the cluster
itself. Apologies for the somewhat lengthy preamble by the way.

So what then are the pros and cons? I've mentioned having fewer databases in
any one instance, I guess thereby making Admin easier, at least in terms of
managing scheduled jobs, etc. Are there technical advantages as well (or
indeed disadvantages)? I figure memory management could be more effective -
i.e.the individual instances could be apportioned the optimum amounts of
memory. Security might also be improved. By the way, the cluster nodes are
quad-core Intels running Win 2003 Server. Does this mean that the
multi-threading capabilities of such cores will mean better management of,
for example, locking, blocking or even more efficient running of scheduled
jobs?

And what, if any, advantages/disadvantages are there in terms of I/O?
Databases are all held off-server on FAS storage in this case. Will having
several instances instead of one mean better performance, poorer performance,
no change?

I'm sure there are lots of other things I haven't mentioned or indeed
thought of. I would certainly welcome any and all advice, points of view,
comments, etc.

Regards,

YaHozna.
.

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