Currently there are three types of instance portals in World of Warcraft.
Each one with a different meaning.
The Blue Instance Portal;
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The Blue instance portal is a portal which leads to 5-man non-hardcore PvE instances. (The one in Stormwind *not Stockades* is different, it just fits the color scheme, currently has no use. Will be used for Player-Owned housing.) It is used for instances such as The Deadmines, Ragefire Chasm, Stratholme and many many many other instances.
The Red Instance Portal;
The Red instance portal is an "ubar l33t h4x0rrr" portal. It leads to PvP instances where players can attack other players. It is currently used for Warsong Gultch, Arathi Basin and Alterac Valley. All battleground instances, pvp instances, and "ubar l33t h4x0rrr" instances.
The Green Instance Portal;
The Green instance portal is by far the most mysterious portals. It currently is used for Molten Core and Blackwing Lair instances which are 40-man instances that take hours to complete. This instance portal is used for raiding instances, the image above is an instance in Hyjal, currently thought as, as Deathwing's Lair. Currently not implemented.
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Sorry man the one in SW isnt going to be player housing, BLizzard said they want to have player housing but have no plans yet to put it into effect and will not be in the XP. Another rumor is it will be an instance called "The lair of the sewer beast" or simply the "Stormwind sewers" This rumor is more widely belived and has not been disproven as of date.
Besides it would make more sence because theres room for a staircase going down or something but not enough room for a full house since its right on a the SW wall. =P
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