I'm not sure how much this is still a problem, but every time I've tried to group with a friend of mine, we always end up "invisible" to one another (except the arrow, of course) which I take to mean we're not in the same instance. This has happened every single time we've connected in-game and is not always fixed by a 'Teleport to player' or a relog.
I've also had a lot of trouble with instancing in dungeons, for example recently when trying to complete Spindleclutch (where it seems now the first cave is bugged so I still can't complete the quest).
Is this still a common problem for people? I just haven't seen anything on it recently and so I didn't know if it was mostly fixed or if it is still just a known issue and they're working on it and we'll just wait and see XD