We've been discussing this for a while now, so search as far back as you like Rog. The word "softsynth" should get you there. You might also have a look at the KVR-Audio site. It's dedicated to the world of softsynths. There are some other great sites listed on Nigel's own Synth Zone main site. Much of what I learned came from going to these sites.
To simplify, a soft synth or Vsti is simply a software sound module. Think of your midi keyboard. When you strike a note, or use your sustain pedal, you're sending a midi message to the sound module inside of that keyboard. A soft synth is also a sound module, it just differs in that your computer hosts it and your sound card plays the part of your audio amplifier.
Think of a VST effect as maybe the Chorus pedal on a guitar, or any of the DSP effects in your kb. Again, your computer and soundcard replace your amplifier or kb.
A host app can be a standalone, such as Chainer or Forte. Think hardware rack. It hosts your vst instruments and effects. You send midi commands to it, and it works like your hardware hosts ( kbs ) do.
An application such as Cubase or Cakewalk Sonar has a virtual rack within, so it can host your vst instruments and effects. It also has a sequencer, like your midi kb, and it also has an audio recorder. It's kind of like a Hardware DAW ( think Korg D series / Tascam Digitals, etc), that can host, or is connected to your effects and sound module rack.
One Man Band, Jammer Live, Live Styler, etc are software aranger modules, that like your hardware arranger, send a special set of midi commands to your sound module based on chords you play, style and vatriation you select, etc.
Literally, you can simply start by thinking "outside of the box". The box in this case being your kb and / or effects rack. Software is simply taking these features, adding the ability to customize them as you wish, and using them in your computer.
Believe me, only a very few years ago I had no idea either how any of this stuff could possibly apply to and work for me. I'm serious when I tell you that without reading what FLR was posting here, I'm probably still playing a 100% hardware based system. The really cool thing is that in the past couple of years, some of this stuff has gotten so good that I could now work without hardware of any kind, save for a midi controller ( or Dumb KB as FLR says it ).
I am a little nostalgic for the old Prophet 5's, the Korg Polysix ( my first real analog ) etc, and all the buttons and knobs, but those things are so old and many are in poor repair if they are available at all. The "virtual" polysix looks exactly like it's real world counterpart, and has the very same quirky sounds to boot. With a midi controller that has assignable knobs and sliders, I can control the Polysix's virtual knobs much in the same way as when I played the real one some 20+ years ago.
[This message has been edited by Bluezplayer (edited 06-22-2005).]