Increases the damage done by your spells and your critical strike chance by 1%.
Arcane Instability is a Mage talent that increases spell damage and critical strike chance. This affects all three spell schools the mage has. The spell damage bonus applies to the spell damage from gear and stats, where the critical strike chance is a flat percent increase. This is an all around good talent for increasing damage, as it scales well with gear upgrades.
Patch 3.2.0 (04-Aug-2009): Tooltip reworded to clarify design intent.
Patch 1.6.0 (12-Jul-2005): Fixed a bug where rank 3 of this talent was not increasing the periodic damage of various spells by the correct amount (was increasing by 2% and should now properly increase by 3%).