VST stands for Virtual Studio Technology - a protocol for writing plug-ins developed by Steinberg, the company who created Cubase, Wavelab, etc.
Within the VST plug-ins, there are effects (reverb, etc.) and VSTi's (virtual instruments, ie. drums, synths, etc.).
Unlike Cubase and Wavelab, the VST protocol is known as (I hope I have the vocabulary right here....) "open code." Steinberg does not share their code for Cubase, but shares the necessary protocols for other third parties to develop their own plug-ins that will be compatable with VST.
Some VST plug-ins are free, and others are not - in fact, some are rather expensive.
Other software platforms are known as VST compatable, which means that, though they are not Cubase, they WILL run vst plug-ins. There is a certain amount of market pressure among the non-Cubase developers to make their software compatable with VST plugs.
Chris