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It's way like the instanced dungeons in WoW, but in Guild Wars, everything outside the towns is instanced. Plus, Guild Wars doesn't have a "one-piece" world, it's split up into several small areas. In the end, GW is not a "full" MMORPG not because of the instaced world, but because of the fact that PvE is just a gimmick and doesn't have the quality of WoW or EQ2 for example. But if you like PvP, GW is a very well balanced and highly recommendable game. But don't expect something like WoW, I made this mistake myself and bought GW because I wanted to play a MMORPG and didn't want to pay monthly fees, and as I'm not into this whole PvP thingy that much, I ended up playing WoW and paying for it. So I hope you are more the competitive type of player... otherwise GW won't be satisfying.
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