Instrument separation actually sounds pretty good to me on these, on the better end of the spectrum even, especially among budget headphones. And especially when it comes to bass guitars. I'm hearing some bass lines I never heard before and that is quite exciting to not hear it fully drowned out by the music on songs that I know I've listened to before and never heard it distinctly like that.
I don't know if these are extremely source-sensitive maybe? I'm using an X-Fi Go Pro USB sound card, and the separation is just fine. Mids are great, not recessed, and even a little forward. Treble is very present, well-extended, but colored, for sure, but I don't mind it. Lots of detail but it sounds like the treble peaks more toward the 'mid' area of treble instead of the highest frequencies, so it does result in some interesting-sounding cymbals, but it really pulls some crunch forward out of the guitar and I love that.
I'd prefer the treble to be slightly more smooth but I expect that to level out over time. Bass/Mid-Bass is wonderful on these. I'm very surprised to hear that to some ears these have no mids and treble? I couldn't handle these if they had any MORE treble, IMO. I need to try on other sources (iPod, Macbook, iPhone) and see what kind of differences I can hear.
These cans are heaven for anything acoustic. Listening to John Mayer acoustic versions, Andy McKee, Sunny Day Real Estate, Jeremy Enigk, and others on these is joyous, especially for the price.