Instance types are preconfigured CPU/RAM/Disk/Bandwidth packages that can be selected during the VS creation process. You can add multiple instance types specifying different values for the parameters to suit your customer's needs. Resources that are not set when creating an instance type, such as, for example, swap disk size, are calculated automatically.
To provide your users with ability to choose VSs resources from the predefined instance type(s), add the necessary types to the users' billing plan(s). After that, instance types will appear in the server creation wizard, on the Resources step.