A few interesting things -- they "block out" the instances first, create lower-res versions of them to play around in and create the mechanics for the fights. They also do some boss testing outside of the environments -- Razorscale, specifically, says Stockton, was actually tested down in the Stranglethorn Arena. Finally, once the encounter team works out the basics of the encounters, the art and item teams move in, and create art and loot, sometimes with the two of them collaborating (the art team will make a cool item for a boss, and then the item team, with the help of Greg "Ghostcrawler" Street, will give the item stats and balance). Interesting just how collaborative the whole process is -- even the Ironbound Proto-drake mount came from the team seeing Razorscale and wanting to put him in mount form. It's nice and all hearing Blizzard remember the Fry's launch, but it's nicer getting an inside look at their process.