Well you're right that actually producing and selling a pure VSTi solution is easier to get out the door, but that makes an even better case for why innovation might be occurring more rapidly here, thus resulting in VST improvements happening faster than hardware can keep up (my original point that I think you were disagreeing with).

Aha... this probably explains why we aren't on the same page here. Any issues I have with the Virus as an instrument have nothing to do with how good it is as a standalone keyboard. I've mentioned this before but if I could only have one keyboard on stage with me it would be a Virus. If I did play live (I don't), having hardware like that would be much more important to me than lugging around a laptop, controller, dinking with stuff in software, etc. But it is the DAW integration I'm talking about here. If your music creation centers around the software host, getting a bunch of hardware to behave as well as a softsynth can be a chore. I fall into that category of folks who is very DAW-centric. So, my only rationale for adding hardware would be (A) offload processing power from the CPU (B) get better sound than a softsynth can provide, hopefully via things like more responsive filters and dedicated fx that do not have to compete with an mainstream PC OS for resources. However, if in the quest for (A) & (B) I am for one moment burned with misbhaving hardware, synchronization issues, latency issues, USB limitations, etc., then the advantage of having hardware at all can be a huge disadvantage. Everyone's workflow is different, I acknowledge, but for me I have very limited time to create music, so nothing must stand in the way of the creative process. If it does, it is a tumor in my workflow and will be removed.

I love the concept behind Total Integration -- I think they have the right idea, they just need to improve upon it. I am very eager to see if they solve this with the next generation of Virus products, nothing I'd love more to own one but it must promise not to misbehave too much :)

OK, maybe a SonicCore Xite-1 could satisfy your (A) and (B) point then.
Lot's of CPU power (DSP actually), a bunch of good sounding synths, ultra low latency and a flexible rig including mixer, FX ...
But they still have to work on the VST/DAW Integration point.
Latencies issues are mainly due to sending data to the hardware and then back but this is the same as with UAD2, PowerCore, Duende or Liquid Mix.

The advantage of both Virus TI and Xite-1 is that they provide their own outputs so they can act as if they were your DAW "soundcard" outputs.

The tremendous advantage of the Virus is its well designed control surface. This is one of the main reason of the success of the first Virus I think.
I just prefer real knobs rather than mouse clicks.

On a similar level one should also check the Arturia Origin which also looks quite promising.

I also agree that VSTi being "easier" to design allows much more clever people to offer innovative synth concepts. It just allows more people to provide new concept without the need to worry about hardware ... except that they also have to deal with new OS issues

Looks interesting, although $4k and then I have to buy plugins is quite steep. Plus my lack of familiarity with the product -- I might be inclined to look at Powercore first just to get the Virus plugin.

I agree the overall control surface is nice. In my case, tweaking them as I played didn't do me a lot of good because of the other issues I mentioned, but as far as the knob layout, the feel of them, etc I wish all synths were like the Virus. Also, the Virus Control VST user interface is great... its just that with FLStudio on 64-bit Windows, using VC was impractical for me. Granted, if I was on 32bit Cubase I probably would not have had as many issues.

Sad really, I wanted to make it work from so many angles.

Difference between Xite-1 and PowerCore is that the use of PowerCore is limited to the VST mode, whereas Xite-1 has a hardware mode possible because of the integration of the I/Os.
The Xite-1 is already provided with a bunch of marvellous plug-ins and especillay synth plug-ins (Minimax, Pro12, LightWave, Vectron, Modular 2/III, UKNOW 007, BlueSynth) and there are also great freebies. Only Scope plug-in can run on it though.
So no Virus plug-in available except for some attempts (I think the commercial Void is something like this)
I do think that the PowerCore is missing some integrated I/O: I would have been interested in it for the Access Virus and Novation V-station on that platform but there you need to go through a VST host sequencer with latency issues. With the Scope Xite-1 mode you can plug a MIDI IN and play live as if it was a Hardware synth (you just need a host PC for let the thing start and manage presets).

Another interesting attempt to unleash the softsynth creativity on a hardware synth was the Soundarts Chameleon. More complex to program software on this on (this is real hardware), but I love this idea too.
Their Australis also sound great but they now lack some DSP power and advanced digital I/O. The user interface was also too limited but it would be possible of building up a more Virus like one.
Regarding the synth control interface, Novation KS series, clavia Nord lead series and the Waldorf MicroWave XT and Q were also quite straightforward.

Thanks for the info, I am increasingly keeping an eye on these dedicated DSP solutions. The one thing I wonder about is -- do we really need dedicated DSPs in the future with CPUs getting all these additional cores? IMO, the limitation right now is software not making effective use of parallelism. I've got a dual-GPU card (which supports CUDA), and folks are already starting to come out with things like plugins that use the extra GPU (can't remember the name of it but there is a convolution reverb that uses CUDA). I'd imagine the GPUs in my video card are way more powerful than both the Ti2 DSPs put together, and as long as that GPU isn't already processing graphics, why can't it take on the workload of oscilators or fx? Just thinking out loud here, maybe a conversation for another thread.

Don't get me wrong, I'd love to have all the gear you've mentioned. Give me 2 Viruses and a Nord Lead, and I'm done -- just lock me in a room... until I want to produce a well-timed track then I'm hosed.

As I was typing this, I came to a realization why my software integration expectations are so high. The first hardware synth I ever owned was a Kawai K5 additive synth -- I see new synths touting "additive" synthesis, supposedly the only form of synthesis that truly has the (almost unapproachable) capability of truly synthesizing any sound (without cheating like sampling). But most of these are not a true additive synth the way the K5 was. It was a bitch to program, but I had "Dr. T's Editor" for the Atari ST computer which enabled me to draw waveforms with the mouse etc (for those too young to remember, the Atari ST was a computer with built in MIDI ports --- it WAS the audio interface.. :) ) So fast forward from 1987 to 2010, and the synth hardware to software interface has not really changed much. In fact, on my OS/DAW combination, the Virus Control plug-in to the hardware was worse - full of latency and bad performance, and I'm very technical and relatively good at troubleshooting anything in that realm. Was it the immaturity of Access' 64bit drivers perhaps? Maybe, but that should have been corrected by the time that 64bit Windows 7 was selling like hotcakes and becoming defacto. I'd like to think I can buy a Mac and all my problems will go away, but I see Logic folks complaining sometimes too.

So, I'd just like to see it all work. Or at least well-tested enough that they can clearly tell me the computer hardware environment required to make it all work.

Until then, I may be a purely software guy. Also, as much as I love the hardware and the musical inspiration that comes with it, sometimes I hear great tracks produced with Virus + VST only to find out the part that really caught my ears was the VST.. Side by side, once crunched down to MP3, I'm not sure anyone can know the difference.

Just noticed there is something new regarding "hardware" VST Host like Muse Research Receptor or SMProAudio V-machine ...

the FellTune Rhizome :
http://www.feeltune.com/products.php

I think one of the most innovative feature of this one is its hardware controller implementation. I feel the integration is the main feature of this one.

I think that is primarily a PC (running Windows XP), so I think of it like a laptop with knobs. The processor is considerably less than what I run in my PC now, although it would probably perform better due to lack of lots of other services, etc.

There are some similar solutions here: http://www.openlabs.com

However, with these I'd be giving up my large monitor, computer keyboard and mouse for editing in favor of portability. I'm kind of wishing in the other direction, where I could have something like a Ti Desktop or Snow (or actually many of them if it were cost effective enough) which I can control through my host.

But I think the Rhizome, Neko etc. probably don't have latency issues.

Your wish will keep you having to deal with latency issues as you would have to deal with sending sound flow to these devices and then back to your host which then send it to its own DAC ...

Indeed.. this is why I'm pure softsynth at the moment and loving it.

And this is why I am using hardware combined with Scope DSP ... ;)
The Dac of the Scope are more than enough for me and provide a bunch of I/O. It is true that Scope also provide mixer, FX, and so on which is maybe unavailable with the TI
I just still wonder why you don't use the Virus as a real world output for your whole system ...