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I have only found a few times that I needed to Burst the instance, Both times it was eather fix the rendered veiw or to export it into another CAD/CAM program!

As for the advantages/Disadvantages:
The biggest disadvantage is that the geometry is nolonger assocated with your model. I have use the bursting method for Exploded ISO view.
You could say that it is an advantage and a disadvantage! 

Sometimes, the HLR or HLR-dashed Does not completely or corrrect do the job.  Bursting allows you to clean up the view.

Another reason has cropped up.  KC 4.0.2 has a bug in the intance auto align routine.  Some instances just will not auto align correctly.  Bursting allows you to touch the geometry so you can move it to the correct location.

As a general rule, I try to keep from bursting instances.  Bursting them is usually a last resort.