ive dps'd numerous times on my shadow priest in instances, and i'm almost always 2nd to rogues on the charts, otherwise 1st.
theres only 2 spells you need: SW:Pain, mind flay.
shadow vulnerability will keep stacking, and on boss fights/high HP mobs, your dps keeps rising and rising.
mind blast is used seldomly because of the high aggro it generates, i only use it in instances when given the thumbs up to burn em down, and i always have fade prepared in case i do pull aggro.
i prefer not to use vampiric embrace because dpsing + healing = a lot of aggro.
it seems when i use it i cant attack until the mob hits at least 90% or i'll pull aggro, though of course, its guaranteed to be used in a boss fight
attack sequence in instances should be (at least mine is):
vampiric touch, sw:pain, mind flay, mind flay, mind flay, mind flay...till death!
and on bosses:
vampiric embrace, vampiric touch, sw:pain, mind flay...you get the idea.
on a personal note, as a shadow priest, i'm overcome with joy everytime a druid/pally/shaman states he's healing specced :D