Anyone know the difference in the above? i get a choice of what type to insert.
 
Thanks

Need a little more to go on. VST usually refers to the VST2 plugin format. To me the terms VST and VST Plugin would be the same. MC6 supports VST2 and DirectX plug-ins. MC7 supports VST2, VST3 and DirectX plug-ins.

When i go to insert softsynth - out of the options that are available, two of them are 'VST' or 'VST Plugin'. Not sure what the difference is. Using MC6.

Unfortunately I have never seen MC6.
A picture might help.
 

http://imgur.com/U9ZXpFV
 

FYI you can embed images by clicking the icon in the red box and pasting it into your message
 

 
Here is the answer to your question, those are folders you created.  When the VST scanner searches the scan paths defined in Preferences > File > VST Settings and finds plug-ins in nested folders it creates the directory tree as menu options. My guess is your scan path settings are a little messed up. The VST scanner recursively searches the paths provided.

 Thats answered that question.