Instant coffee starts off as, well, coffee! But how does it get from freshly-brewed cuppa to powdery flake? Therein lies the science...
There are actually two methods for making instant coffee. In the first, liquid coffee is sprayed in a fine mist through very hot, very dry air. By the time the coffee droplets land, they have dried into a powder.
The second method is freeze-drying, where the liquid is forced from the frozen coffee through chemical sublimation. Reaching back for our 8th grade science lessons, this process forces the ice to vaporize without going through the liquid stage. In the case of instant coffee, this leaves behind a shelf-stable coffee powder that can then be reconstituted in water.
Both methods have an adverse affect on the flavor and caffeine-content in the reconstituted coffee, though freeze-drying leaves more of the aroma compounds intact. In some cases, the coffee powder is then supplemented with additional flavor and aroma compounds to better simulated fresh coffee.
Even if you don't drink instant coffee, it's a handy product to keep around the kitchen. Because it's so concentrated, instant coffee is often much more effective at infusing a recipe with coffee-flavor than fresh liquid coffee. Using fresh coffee can also throw off the ratio of liquids.
How do you use instant coffee in your baking and cooking?
Related: Coffee Methods: The French Press
(Image: Flickr member Refracted Moments licensed under Creative Commons)

Comments (4)
Here's a question: when a recipe calls for espresso powder, is it really necessary to seek out espresso powder? Is there a discernible difference between it an regular powdered coffee? I've never seen espresso powder in the store.
Because espresso refers to the process by which the drink is made, there is no necessary difference in the ground coffee itself. However, espresso is usually made with darker roasts, which contributes to the flavor. So I imagine that since powdered espresso is really just powdered (probably dark roast) coffee beans, standard powdered coffee would be just fine.
I have only ever seen one brand of instant espresso - Medaglia D'Oro. It is sold at every supermarket near where I live, and at Target.
I have taken a queue from the book Baked: New Frontiers in Baking by Matt Lewis and Renato Poliafito and now add a 2 teaspoons to my aunt's famous banana bread recipe (along with a cup of chocolate chips).
Traveling through Mexico a couple of years ago, the best drink to keep you warm was to ask for warm goat's milk, add some brown sugar and instant coffee. So many restaurants had those easily-spotted Nescafe jars on the dining tables!