Hawk,
A validation is a document that recognize PIC authority for the only purpose of acting as PIC on a foreign registered aircraft in non-commercial operations. In fact, under ICAO there is no provision about granting a validation of a instructor rating. What you can validate, is an ATPL, a CPL or a PPL but in any case the validation will be done to a PPL level.
That means that even if I hold an ATPL, the validation will be done to a PPL level.
If you think about it, that's why they came out with the JAA system. No aviation authority can recognize a foreign license to act as PIC in commercial operations since every authority has different rules.
Now, an example for you: I have an ATPL issued from JAA and I need to ferry an US registered aircraft from USA to Europe for the UK company I am working with. FAA issues a validation to me, but I still can't do it, because that would be a commercial operation, since it is done for compensation. The only thing I could do in this case is to ferry my own aircraft.
One more thing, still under ICAO provisions, any certificate of validation is conditional to a local flight review and medical certificate.