Dear Paul,
VE - Vienna Ensemble
Think of it as a host for multiple Vienna Instruments plugins - in the same was as you would use Brainspawn Forte or Logic. So, for example, you could have all of your Wind instruments in a single 16 channel Vienna Ensemble instruments, each addressable on their own channel. Instead of having 16 VI plugins, you instead have 1 Vienna Ensemble plugin.
It's better than this however, because it seems less CPU intensive than 16 separate instances, and because the memory seems directly addressable by Vienna Ensemble, there doesn't seem to be any lag moving between VI "instances" in VE. Additionally, Vienna provides a power panning feature within the VE interface.
So - in short - think of VE like a mixing interface for VIs. You can use define busses, and load a setup of VIs as a single file. I use it to simply replace Brainspawn Forte in my setup. Since i have a multi-PC setup driven from a Mac running logic, I run it on the four separate PCs, but lots of people run it on their Sequencer machine as the plugin instead of multiple instances of VI.
I hope this is the kind of explanation you're looking for, and that I haven't been too simplistic (or that you are actually asking a more complex question that I'm not understanding...!).
Kind Regards,
Nick.