I would personally ask Microsoft how to upgrade one instance at a time.
The installation process for each SQL instance requires separate install files under program files, it has its own registry keys and data files. Therefore 10 SQL instances required 10 separate installations of SQL on each node (20 installations in total). Patch installation for each Instance is the same.
IMHO, an upgrade of each instance should be no different.
Symantec has a publication called "
Applying service packs, patches, and hotfixes to SQL Server 2005" : ftp://exftpp.symantec.com/pub/support/products/Storage_Foundation_for_Windows/308671.pdf
See if this "
SQL Server 2005 Upgrade Handbook" helps to answer your questions.