You are right that is a combination.
On ensemble instruments, it is usually effective to use velocity crossfade combined with expression (which is pure volume divorced from timbre changes). On solo instruments, you may need to use dynamic samples because those tend to be more realistic. This involves placing a crescendo or diminuendo into a line, with possibly sforzando or fortepiano for certain accents.
What I have been doing recently is to use velocity crossfade on all the ensemble instruments, especially strings, that is then augmented by adding some expression usually at the end of notes that need to fade away more expressively than the crossfade layers can do. On solos, you might tend to use note-on velocity controlled samples until a real-time crescendo or dim is needed, at which time you would keyswitch in a dynamic sample that fits the time value. Once in a while you can use crossfade on solo instrumen ts, but many times you can hear the phasing between velocity layers or it simply doesn't sound as real as the dynamic samples.
You can set up one controller for turning on velocity crossfade, and another controller (such as mod wheel) for the amount. What I ended up doing is to use the pitch wheel for switching on velocity crossfade (since it is readily available on any controller and I never use it for actual pitch changes) and then mod wheel for the amount of crossfade. Then, you can can do sudden changes from note-on velocity to crossfade velocity which can be very expressive, and much like the sudden accents or diminuendos you hear in orchestra.
One other thing - I decided to use volume for the initial track volume only, and expression for real-time changes. That way, you don't forget that you made an overall volume change in the middle of a track. And you can use the volume setting for the general loudness of the instrument, such as a flute compared to timpani. Expression and volume control exactly the same thing - overall level without any reference to articulations or velocity layers - but by breaking it down this way you have a general setting (volume) and a more specific musical setting (expression) to work with.