Discussion of the concepts of intrinsic and instrumental value goes back at least as far as the ancient Greeks. It has pretty much gone unchallenged for all that time until the last hundred years or so, but even then there really haven't been any major challenges to the concept. The concept of human beings as intrinsically valuable is important when it comes to the discussion of abortion, and the concept of human rights, themselves, only make sense insofar as human beings are seen as intrinsically valuable. As was the case with my recent article about capacities, this is only a very basic discussion of these concepts. You can see this article here for a more in-depth treatment of these concepts.
When we say that something is intrinsically valuable, this means that something is valuable in itself. These are things that are pursued for their own sake, not to acquire something else. Things like happiness, truth, and goodness are all intrinsically valuable. You do not, or at least should not, pursue these things to get you something else, but they should be pursued because they are good in themselves. You don't need a reason to pursue truth; the fact that truth is good in itself is enough.
Human beings are likewise intrinsically valuable. They are valuable because they are rational agents. As intrinsically valuable entities, human beings are good in themselves and to use them as a means to an end (or, at least, merely as a means to an end) is wrong.
Now the question usually comes up, how does this apply to someone who provides us a service, such as a car mechanic or a musician? Aren't we using them as a means to an end when we hire them to perform a service? The answer to this is most definitely no. If you were to force a mechanic to fix your car against his will or to refuse to pay him after he performs that service, then that would obviously be wrong. But if you hire someone to fix your car (or provide music, or to operate on you, etc.), then you are using your money as a means to an end (see below), not the person. In this case, the mechanic is providing you with his time and expertise, and you are compensating him by providing him with money.
Instrumental value is a type of extrinsic value because its value comes from outside itself. Something that is instrumentally valuable is valuable as a means to an end. So money and video games are instrumentally valuable. They are only valuable because we place value on them. If we did not value dollar bills, they would be worth no more than the paper that they're printed on (or the metal that they're minted with). We use things that are instrumentally valuable as a means to get us something else, usually something that's intrinsically valuable.
Animals are a controversial example. Animal rights activists consider animals to be intrinsically valuable, but I don't. As non-rational entities, they are not valuable in themselves but they are valuable only insofar as humans have need. As rational agents, we can recognize right from wrong and act accordingly. We can recognize duties and obligations that we have to others, duties and obligations that animals don't have to each other or to us because they simply cannot recognize when something is right or wrong. If a human kills another human, it is murder. If a lion kills a gazelle, it is not murder, because neither lions nor gazelles are rational agents.
Flora is another example of instrumental value. Plant-life and trees are not valuable in themselves, which is why it is not wrong to pluck roses to give a significant other or to chop down trees to make furniture or paper. These entities are only valuable insofar as people value them. They are valuable to us because they add beauty to our planet, they take in carbon dioxide and provide oxygen, they provide shade, they provide the raw materials for building fires, furniture, houses, and other things. But their value comes from without, not from within.
The difference between intrinsic and instrumental value is an important one for the abortion debate, because all human beings are intrinsically valuable. It is wrong to kill a human being for the sake of convenience, or because we find ourselves in a difficult situation (the difficult situation should be eliminated, not the human person). Not only does abortion kill an innocent human being, but it also treats them as a means to an end, something to be eliminated to make our lives easier. This is also one reason why comparing the unborn to an acorn (as is often done) is not only biologically inept, but a false analogy when comparing value. An acorn is the same entity as the oak tree it will become, but it is not seriously wrong to kill an acorn or an oak tree, whereas it is seriously wrong to kill a human being unjustly at any stage of development.