Hi again Jonathan,
First of all once again, I'd strongly advise you to get to grips with the VI interface first - it's very powerful and there's a lot to learn, although it's beautifully designed to allow you to be doing something useful very quickly. Watch the video tutorials here on the VSL site, check out Beat's pages and keep an eye on this forum as there are a lot of real experts lurking.
The usual way of working with VIs is using Instrument Tracks in PT as that keeps MIDI and audio together. However, if you do decide to work with VE then things are a little different because you'll need separate MIDI tracks. You can insert VE either into an Instrument Track or an Aux Input, if you prefer. Either way you'll then need to create one MIDI track for each VI instrument loaded into VE and set the MIDI channels accordingly.
When you create a new VI inside VE, the MIDI channel defaults to "OMNI" which means it's receiving MIDI on all channels that are sending data to that VE instance. So you'll need to set each VI to its own unique MIDI channel, 1-16. Then you'll need to create as many MIDI channels as you'll have VIs. On each MIDI track if you click on the output you'll see something like "Vienna Ensemble 1" in the list of possible outputs and then 16 channels for it. So for each track you choose the appropriate channel. So yes, you can have up to 16 instances of VIs inside VE, each on its own MIDI channel. You then mix the VIs inside VE and the sound is returned on the Aux In or Instrument track you're using to hold VE.
Which you should choose is down to you - and of course you can use both (e.g. you could have a dozen or so VIs inside VE and then a few more individual VIs on instrument tracks) or alternate between them. VE does seem to be slightly more efficient in terms of maximising your VI count (I managed to get a couple more using VE than using individual VIs) but that's only really an issue if you need a lot of VI instances. Personally I've found that with around 16 I have no problems at all on my PT|HD1 system.
One other advantage of VE comes if you have a lot of RAM that you want to use to load more samples. Current Mac applications can only address a limited amount of RAM (around 3Gb, if I remember rightly but I'm not an expert) so it's possible to use VE to access more.
Anyway, that'll do to start with. Feel free to contact me if I can help with anything else.
Nick
Mac Mini M2 16Gb RAM 500Gb int. SSD 2Tb ext. SSD Pro Tools/Mixbus An awful lot of VI, Synchron-ised and Synchron libraries, amongst others. VSL user since 2003.