Is there a difference between launching a Server and launching an Instance?

When you launch a Server, an Instance will be launched in the specified cloud infrastructure.  You cannot launch a Server without subsequently launching an Instance.  However, you can launch an Instance directly from a machine image.  For example, in Amazon EC2, you can launch an Instance using one of Amazon's AMIs, a RightImage published by RightScale, or a custom image of your own that you created by bundling a running Instance.  In such cases, you can still manage the Instance in the RightScale Management Platform, however since it's technically not a RightScale Server, you cannot run RightScripts or Chef Recipes.  Monitoring and alerts are also disabled.  To properly take advantage of all the benefits of the RightScale Management Platform, you should use Servers to launch Instances in the cloud.

Instances that are launched directly from an image are not considered RightScale Servers, so they will not be listed under Manage -> Servers.  However, they will appear under the Cloud or AWS Region in which they were launched.  (e.g. Clouds -> AWS Region -> EC2 Instances)  Typically, you will only want to launch an instance directly from an image for testing purposes only.  Perhaps you've built a customized RightImage, but you need to first test and verify that a bare instance can successfully be launched before you reference that image in a MultiCloud Image and leverage it in your ServerTemplates.