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VST is a protocol made by Steinberg, and means Virtual Studio Technology. The name pretty much says it. It allows you to implement effect and instrument plugins into programs that support VST technology.
Most actual plugins and instruments follow the VST2 protocol.
DX effects and instruments are practically the same, except they use the DirectX API from Microsoft. Usually, the sound quality is the same, but VST is a little bit more optimised (less cpu overhead) although lately DX plugins are starting to be pretty optimized.
Like Cheggy said, there are other protocols : TDM/HD, AS, RTAS, MAS and AU mainly
TDM : Time Domain Multiplexing. Made by Digidesign, makers of Protools. They need Digidesign Mix or Farm cards, which are cards with DSP's. Not so long ago, Digidesign changed to the HD systems (more powerful DSP's), and even less long ago, they went Accel (yet more power). So if you see HD plugins/instruments, you need the appropriate hardware. Normally, HD and Accel systems still can run TDM plugins.
AS : AudioSuite, for protools. Offline process effects.
RTAS : Real Time AudioSuite, for protools also. Same as AS, but available realtime.
MAS : Motu Audio System. Made by Motu. Obviously, they work under Motu software, of which Digital Performer is the most famous.
AU : Audio Unit. By apple/emagic. Kind of an extra move to show that, after the buy over of emagic by apple, that they wanted to separate completely from Steinberg (biggest competitor), by making an own format. Logic for Mac doesn't support VST natively anymore.
Now, if the programmers did their job well, the sound results will be exactly the same. There could be small differences in cpu use, but with good programming they should be kept to a minimum.
So, what protocol to use. Well, VST is probably the most spread out protocol. Cubase PC/Mac obviously supports it, several other softs like Fruity and Orion support it, Sonar 3 supports it too. On Mac, AU is getting pretty big, as Logic is the dominating sequencer. MAS is slowly disappearing. Directx is not on Mac. VST is.
Protools should be considered as a class appart.
FXpansion is pretty famous for it's "wrappers". It's kind of a real time convertor proggie for protocols. They have DX to VST (and vice versa), for mac they got VST to AU, and their latest addition is VST to RTAS (finally VST plugins/instruments in Protools).
Reason and Project5 should be considered as closed systems on their own. They don't accept extra stuff. BUT, Propellerheads made a routing protocol called Rewire, which is getting pretty popular (even Protools accepts it in it's latest versions). It allows you to use the sound generators and effects (who'd want to) of Reason in other programs, like sequencers. So ultimately, with use of an "external" sequencer, it becomes an open system (as that sequencer can record audio, accept 3d party plugins, etc...).
Project 5 is pretty similar, but keep in mind it's made by cakewalk, who makes Sonar also. It's obvious that Project 5 will work best in conjunction with Sonar.
So, what to take?
If you work on PC, the two big boys are Cubase and Sonar. They both accept VST and DX. It comes down to personal preference, try using a demo for some time to see what program you like best. Be aware that, while not being complete crap, the plugins and instruments given with Cubase are pretty weak. Sonar has a better reputation here (as they licensed stuff from Sonitus and Lexicon).
Mac : well, Cubase or Logic mainly. Logic is the most powerful, the most difficult to learn also. Be aware you'll need a wrapper to use VST on Logic. Logic also has some pretty solid integrated plugins. They also work with Digidesign. You can buy a package which lets you use Logic as a frontend for TDM or HD hardware.
Like I said, take Protools as a system apart. Protools LE works with an Mbox or Digi001/002, but can mainly profit only from AS and RTAS plugins, except if you use the new wrapper (not included). Pro studio's will usually go for TDM or HD systems. Very expensive, and a pretty closed system.
Of course there are alternatives. For example, Samplitude is gaining more and more support now it has decent sequencing functions. You got Traktion too, which is a cheap VST capable sequencer. Of course Fruity and Orion accept VST's also, but their sequencing will never be as powerful as dedicated sequencers like Cubase or Logic.
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