I have a feeling that this is going to turn into another one of those "Oh yes it is, oh no it isn't" threads. It would be really helpful if some examples of the legato not working were uploaded, so that we can all hear what the problem is.
However,assuming no user errors, the legato is not totally smooth anyway. There are, in my opinion, tow main reasons for this.
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Legato in string sections is not totally smooth in the real world. What makes it smoother with live players, is the fact that they don't all necessarily change note at exactly the same time, so unless you layer patches on more than one string with another MIDI performance (i.e. not copy and paste of the original) you will not get the effect you are looking for.
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The way that VSL produces legato instruments means that when you listen to them dry, you hear a kind of blip as the notes change. This is the transition material. Unfortunately you can't change the release of the outgoing note (big mistake IMO), so you are stuck with this. However, as soon as some reverb is used, this flaw is reduced drastically. Now here is the important part. If you use reverb on a send, some of the dry signal gets through (at least 50%, if you do it post fader), so this blip remains. However, if use an insert of a very short room reverb set to 100%, then this blip all but goes away. It also has the advantage of making the samples sound more like an instrument, rather than a series of audio snapshots glued together.
I hope that this helps.
DG