I looked on their site for the answer...no dice.
So I picked up the sx3/nuendo3 .pdf off their ftp server.
This is what they are doing;

This shows a dialog window for three post hookup ajustments.
1-delay=how much time do I want sx to wait after play/start button has occured.(this will allow for the external fx audio to get to your ears the same time fx source does.)
This is most important if you intend on mixing the dry source with the wet fx inside the host.
If these signals are off slightly,you`ll get a shift in phase alignment and frequency cancellations.
2-send gain
3-return gain
-no need to explain these.
-----------------------------------
In the steinberg document,it was implied that this new feature be used for playback...There was no mention of what might be expected if you want to, say,play a vsti while sending it`s audio signal through your hardware fx processor.
This is easy to see...BIG TIME LATENCY PROB!
Well,I can live with ext fx on playback only.
I`ll just use some similar vst plug so I can hear an effect while playing/recording.
Steinberg also made the assumption that only hardware with "lookahead"circuits,(sample hold),will need delay,(latency), compensation...taking no accounting for d/a a/d convertion processing at all!!(let alone that NO hardware fx will be without SOME delay between the in and outputs.
And I say again...if mixing dry and wet in the host...that`s enough to be out of phase.
I`m happy to see it in version 3 no matter what!

