Ok, just heard from another guy at TC Helicon (who contradicted the first guy) and also spoke to someone at Focusrite. Incorporating all the guidance, I'm going to try this again over the next few days. Hopefully I'll be able to report back with definitive step-by-step instructions for posterity...
 
Thanks again, all.

I'm totally aware of using the TC units as I took one home to try it out as well as our band has one that was used in the past but I made them ditch it. 
Where the guitar or instrument input can control the structure of the harmony it is very flawed and mixed results are what I found we were getting. You had to play very very clean chords just like with a MIDI guitar synth. The MIDI control is much more accurate and if you understand chord structure and harmony you can get exactly what you want every time. This is much more for live performance than the studio. 
It's funny that no where in the information about the Vl2 does it mention VST integration with a DAW via the usb. But I think what the first guy was saying is you can accsess the audio in and out via the USB or the SPDIF. But the USB would therefore require the device to become your audio interface so that's not going to work with ASIO. 
 
SPDIF is a way to by pass the convertors and keep the audio in the box so yes, if you used that for your audio path instead of your 3/4 analog outputs and then controlling the unit with midi, that would be better.
 
If you don't feel up to programming a midi trigger track for the harmony you will have to send a second track that contains a clean chord like a piano or acoustic guitar played very simply and feed that to the unit.
You would split the 3/4 outs.
Vocals to 3 and trigger track to 4.  So you might as well create a midi piano track and send that via midi as it will work better. That how most that have used harmonizers live for years now have done it. 
 
 

I hope after all your trouble the effect turns out to be worth the effort.
 
I once tried using my VoiceLive Touch as an insert effect, got it working OK but the audio quality was horrid. I rely heavily on it onstage, as it makes our little two-man band sound much bigger. But in a live setting those little pitch mistakes, phasey-ness and artifacts are easier to ignore, much like we ignore amplifier hum or occasionally bumping a microphone. Things that are acceptable in a live situation but are quite unacceptable in a recording.

Hey Mr. Cactus, listening to some of your soundcloud tunes as we speak -- great stuff!  I didn't know they had cowboys in Canada ;-)
 
So far I've actually had good results controlling the harmonies via audio in, but thern again, the chords were, as you say, pretty clean. I have not yet tried midi harmony control. I can work out the chord structures but playing keyboard is not one of my strengths, much less while singing. Maybe I could try via pre-recorded midi track. When all else fails you can just tell VL2 what key the song is in, which works fine unless there are key changes, in which case I'd have to record in segments, one for each key. I'll cross those bridges when I come to them.
 
Yes, the TC Helicon documentation is vague. Hence my quandary.
 
The solution the Focusrite guy suggested was to forget SPDIF and keep the loop all analog. I'll see how it goes.
 
Thanks again! Will report back when I know something. 
 
 
 
 
 
 
 
 
 
 

Thanks bitflipper. Actually the foibles you mention are a big part of the reason why I want to use VL2 as a post-effect rather than live, so I can ID and avoid them.  The more controlled the setting, the better it works, I think. Performing live is stressful enough without having to worry about errant gadgets!
 

Oh so you are using it live! I sort of thought you were using it to record harmonies into Sonar. 
Yes if you use it live then a keyboard is best and Bit is a keyboard player so all is good for them. 
In lew of a live keyboard, yes, you can feed it midi from your DAW or sequencer. 
 
I play as a solo performer as well as in a 5 peice band. 
In the band they had 2 people singing before I came on board, male and female, both strong vocalists. I'm not sure where it came from, but there was this Voice Live?? stomp box sitting patched to the female vocalists mike when I took over lead guitar and sound guy duties. She called it " The Girls" and only used one setting for Already Gone and a few other songs. The other singers guitar was the feed to control the harmonies. 
As the sound guy I immediately had 2 issues. First, the singer/guitar player had 40' of cable ahead of his amp.... Ya that's right,,, it wasn't working very well and lots of crackles and hum. 
 
Second, they where using identical mikes but the female vocalists had  crappy gain on her mike. I had to turn the gain into the danger zone to make her equal to the other mikes. The TC stomp box was trashing her dry vocal signal. She also was always prone to feedback and the rest of us were not. This is in bypass mode so go figure.. 
I asked them at the second gig if we could just try without the TC box and that was the end of it, they saw the light. I quickly jumped in with the harmony they had really needed so all is good. 
 
A while back after seeing a solo performer doing a great job and using a Voice Live Touch, I brought one home to play around with it. I found they are real crappy pre amps and mine distorted with my Shure Beta 58. But it worked fine if I used it in an effects loop from the mixer. This meant I lost the use of my beloved Lexicon MX200 reverbs and delays and had to use the ones in the Voice live.  So the more I played with it the more I realized it was going to be real hard to get what I wanted at gigs so I took it back. 
I was not looking forward to setting up 125 of my backing tracks to make it work. I figured I be to old to get gigs by the time I was finished :)