Thanks, Scook. There wasn't an interleave button on the MIDI track, but the channel that is being used to access VB3 did.
It didn't help though. The same problem occurs: pan left , just lower rotor, pan right, just upper horns... hold on...
I'm confused. I just played it again and now it pans properly!
I can access the Channel Tools through the primary VB3 channel also. So when you insert a MIDI channel, it defaults its output to to the main MIDI channel from which interleave and Channel Tools is accessed.
I still can't find a help page on Channel Tools. It looks like it could be a pretty helpful plugin.
Thanks again, Scook