Perhaps the distinction you are looking for is this (and this is just off the top of me head, and as a rule of thumb)..
VSTi -virtual studio technology instrument. These will need some midi input from say a keyboard, and produce some kind of (instrumental)sound, say a guitar.
VST - vurtual studio technology. These will apply effects to a sound -EQ, reverb, distortion, wah etc.
/JfX
For further ref:
http://en.wikipedia.org/wiki/Virtual_Studio_Technology