I figured out one part that got it functioning. You need to put the i/o plugin on the MAIN track, not the input event tracks, but you also have to assign an output to it (I picked out 3/4 but it doesn't matter), then bypass it. This is what causes the i/o plugin to actually 'activate' and it keeps the stream running between VEP and the plugin.
However, this introduced a new problem. All is well as long as the transport ISN'T running. Once you enter record or playback it is hit or miss if it picks up on what you are playing. It also began to cause CPU spikes in Logic which I've never gotten before with VEP...fix one problem get another. [:^)]
EDIT: Another pass and I didn't have any more spikes, but there sounds like a 'doubling' of the sound too (you can hear the phasing) during playback. It isn't there when the transport isn't running. All I did was record onto this one track.
EDIT 2: This new issue is only on the EVENT INPUT tracks. Using the track with just the VEP plugin works as expected.