I'll explain as best I can without anny real technical knowledge of why or how they work. VST and VSTi are formats for plug-ins which are like programs with in a program. Like for instance, a guitar amplifier plug-in may be used with kristal recording software to mimic an actual guitar amp on your computer. Audacity is a great rec program but It's not good for VST's. All the effects in Audacity (compressor, fade in/out, etc.) are all plug-ins, but they are not as advanced and interactive as VST's. Kristal is another free rec program that works realy well with VST plug-ins. Often I will record with Audacity and then open the .wav file in kristal and use the VST's to apply effects. Hope this helps some.
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