There are three types of VST plugins.
VST instruments generate audio. They are generally either virtual synthesizers or samplers. Many recreate the look and sound of famous hardware synthesizers. Better known VST instruments include Massive, FM8, Absynth, Sylenth, Reaktor, and Omnisphere.
VST effects process rather than generate audio—and perform the same functions as hardware audio processors such as reverbs and phasers. Other monitoring effects provide visual feedback of the input signal without processing the audio. Most hosts allow multiple effects to be chained. Audio monitoring devices such as spectrum analyzers and meters represent audio characteristics (frequency distribution, amplitude, etc.) visually.
VST MIDI effects process MIDI messages (for example, transpose or arpeggiate) and route the MIDI data to other VST instruments or to hardware devices.