Have you installed Melodyne? Have you installed the most recent version of Melodyne?
1) Without Melodyne you don't have access to this feature
2) The older version of Melodyne that came with X3 and the first round of SPlat updates did not have this feature. Only the latest version allows this and only came out in the 6 months or so. I think the current version is Melodyne 4. I'm not sure how exactly it is updated from the previous version (I haven't done it yet) but you'll definitely have to download it from Celemony (through your Celemony account) and perhaps apply a reg code provided by Cakewalk in your store account. Others could provide more definitive info if this is indeed the problem.
Cheers.
Edit: Ah I see bitman beat me to it and provided some crucial info I was not aware of. That "crashing as a RegionFX" thing does not sound good because that's how you'd NORMALLY use it for pitch correction. I guess I will hold off on installing it myself until I find out what's up with that.
I also recall seeing threads stating Mel 4 overwrites Mel 3 (instead of allowing both versions to be used like other VSTs do when you upgrade). That's a shame.
Thanks, bitman.