The inadequate visual lookout by the pilot-in-command (PIC)/certified flight instructor (CFI) of both aircraft. Contributing factors in the accident were: 1) the frequency congestion of the CTAF 2) the poor in-flight planning decision by the PIC/CFI of the Seminole for his continuing a practice instrument approach to within approximately .6 nautical mile from the approach end of the runway with opposing airplanes departing on the upwind leg, and 3) the absence of guidance in the Aeronautical Information Manual and Advisory Circulars as to how or when to terminate a practice instrument approach to an airport that does not have an operating control tower.