To answer the griping about quests and dynamic events from this thread. dynamic events are different because you walk into them as they are happening, no person is going to give you a quest to go kill 10 rats who are frolicking in the bush. In a DE, those 10 rats are devouring humans left and right and you have to kill them or they'll take over the outpost then spread to the entire map, but instead of a quest giver, you'll see the rats killing and automatically will start aiding the townsfolk. The difference comes both from the method of accepting the activity (automatically vs user controlled in a quest) and in the effect that the outcome of the interaction will be. For example: in a quest to defend a certain choke point, if you fail (die or a fail to protect something) you start all over with no consequences besides time and maybe a repair bill. In a DE, if that choke point is taken by the enemy, that enemy can then use it as a staging ground to expand their influence over the entire map. In addition in order to push them back and "defend the choke point" the players must go in and destroy the enemies occupying it as well as defend it while it is being rebuilt.
Really the big difference is in scope, consequence, methods of acceptance, and in interaction with the game world. Simply put, a Quest can't alter a game world for everyone, Blizz attempted to fix this issue with phasing which while interesting and cool, also forces the game to be even more of a single player game. DE's are essentially another solution to the problem of static mmo worlds, and it's one that encourages group participation, is more intuitive for new players, and has more of a feeling of accomplishment or "epic-ness" when an entire zone bands together to destroy a big baddy.
On the subject of how high DE's scale, the 10 person scaling limit was arrived at after extensive "all calls" at Arena Net. These calls go out and every employee is supposed to log on and play in a certain zone to test it. In the process of testing, the developers found that in minor DEs no more than 10 people were at any one place at any given time, even with 200+ people on the map. This both speaks to the density of content and the overall map design which funnels people into what dynamic events are closest to them as opposed to only one or a few happening at a time. Dynamic events are always happening even if people aren't on the map or that part of the map.