They're both different products and can't really be compared.
Instagram is like twitter but with pictures.
Camera+ is for editing pictures.
The newest version of Instagram, came out today I believe, now has the default resolution of the 5MP camera. However it still uploads to IG with their default 612x612 resolution. Your saved photos from IG are still HD tho.
Camera+ is great if you want to take pictures, manipulate them, etc. and then do as you want with them.