Host and Host Instances in BizTalk
BizTalk Host is a logical containter where you deploy your BizTalk Services such as Orchestration, send and receive and adapter handlers
BizTalk host instance are in fact the physical container where the services run.
You have two type of hosts,
inprocess and isolated.
Inprocess host are used for services running inside the biztalk and can be managed using BizTalk admin.
isolated hosts are used for HTTP, asp.net processes which are potentially running outside the BizTalk services.
create a Host and then you create a host instance.
Unless the host instance is not created and started you dont have a service to process your BizTalk work.
A host instance is responsible for creating the connection between your Biztalk service and BizTalk databases.
You can load balance your biztalk application by creating more no of hosts and you can segragate your orchestrations, ports into diffirent hosts.
Creating more no of hosts can slow down your system as well thus the decision to create more host should be based on message traffic and real need of extra hosts.
Also you can create only one host instance per host on one server.