How do servlets work? Instantiation, sessions, shared variables and multithreading

Suppose, I have a webserver which holds numerous servlets. For information passing among those servlets I am setting session and instance variables.

Now, if 2 or more users send request to this server then what happens to the session variables? Will they all be common for all the users or they will be different for each user. If they are different, then how was the server able to differentiate between different users?

One more similar question, if there are n users accessing a particular servlet, then this servlet gets instantiated only the first time the first user accessed it or does it get instantiated for all the users separately? In other words, what happens to the instance variables?