Agreed. I just tried instapaper based on this statement. I use delicious for saving things for reference and tagging them, mostly as an alternative to bookmarking, particularly for saving obscure stuff that I don't want cluttering my bookmarks and I may never return to, but I really want to be able to find again if I have to. Instapaper looks cool, but doesn't seem like a replacement for that at all.

I agree; I see the two services as complementary. I use Instapaper to keep track of writings that I intend to read. I use Delicious (and/or Pinboard) to file away URLs that I intend to refer to. (Secondarily, I use Delicious/Pinboard to share links with the minority of my friends who also use the service.)

What really bums me out is when an app that I like integrates support for one service but not the other.

It's replaced one small slice of Delicious for me: I no longer tag things 'toRead', I send them to Instapaper instead.