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This is exactly what I was looking for, hosting an AU plugin for apps that don't support it on output, like iTunes & Reason. Just install Soundflower, send system output to "Soundflower (2ch)", select that as input in Hosting AU under the fourth channel as illustrated, and add your plugin.
It looks however like it's much more powerful than that, as a quick way to riff with virtual instruments and adding effects in real time at the touch of a key. Clean no-clutter interface. And so lightweight - 600kB.