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Best Host:

AWEZoom's SKALE Tracker
http://www.skale.org/
Basically a modern version of Fast Tracker, except it supports VSTs.
Comes in Win, Linux, and Mac versions.
It supports MOD and XM formats.
It lets you create games.
A lot more, but isn't that enough already?!
Runner Up:

Kreatives' KRISTAL Audio Engine
http://www.kreatives.org/kristal/index.php
The poor honest man's FL Studio.
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Best Synth:

Stefan Kuhn's Vivaldi MX
http://www.stefan-kuhn.net/content/vivaldimx.html
This synth knowns no bounds when it comes to creative expression.
The modulation and cross filtering options are amazing.
Simple, small, and lethal.
Runner Up:

Chris' SuperWave P8
http://home.btconnect.com/christopherg/main.htm
All of the SuperWave synths are amazing, and if you ever wanted a JP-8000, here you go.
Sounds very close to TC-Works' Mercury 1, 'cept it's free.
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Best Drumsynth:

E-Phonic's Drumatic 3
http://www.e-phonic.com/vstplugins/drumatic_3.html
Boom bips for years to come. Fan-damn-tastic.
Runner Up:

Odo's Rhythms
http://odosynths.panicnow.net/vst.htm
Damn that's a lot of knobs!
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Best Effect:

Oli Larkin's StepComb
http://www.oli.adbe.org/
Stepcomb can elegantly mutilate just about anything in a very useful and sexy manner.
Useful being the key term.
I love Oli Larkin.
Runner Up:

XOXOS' Gum
http://www.xoxos.net/vsti.html#effects
Gum'll take anything and chew it up, then spit the gooey sticky pieces all over your face.
It actually feels good though, that's the strange thing.
(XOXOS please fix the SamplerSepSamples folder creation bug.)
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Best Vocoder:

Richard Wolten's 4ormulator Vocoder Extreme Free Edition
http://www.vocoder-plugins.com/more.html
Not super configurable, but the presets are a blast.
Runner Up:

Richard Wolten's Carrier Impulse Resonator Vocoder Plug-in
http://www.vocoder-plugins.com/
It's more configurable, but not as pyschotic.
Notice how Richard made both of the winners.
That means there aren't enough free vocoders being made.
Plug-In designers; we have enough subtractive/FM synths, glitch effects, and compressors.
Hint-Hint.
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Best Studio Plug:

GVST's GCOMP
http://www.chinaski.org/gvst/
Finally, compression you can visualize and thus truly understand.
Well, worked for me anyway.
Runner Up:

E-phonic's X-Pressor
http://www.e-phonic.com/vstplugins/
This plug can really squeeze and shine anything you bus it to.
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Most Accomplished Producer:
E-Phonic
http://www.e-phonic.com/
Drumatic, LoFi, RetroDelay, Xpressor...
E-Phonic is all about quality over quantity, and it shows.
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Runner Up:
UGO
http://www.cortidesign.com/ugo/
Amazing GUIs and innovative synths, Italian style.
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Runner Up Nominee:
TweakBench
http://www.tweakbench.com/index.php
Aaron's VSTs might save the day or blow up your monitors,
but you can't deny he's on the bleeding edge of innovation.
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Most Underappreciated Producer:
Oli Larkin
http://www.oli.adbe.org/
Oli makes awesome things that I never hear anyone talk about but me...
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Most Overrated Producer:
Toby Bear
http://www.tobybear.de/
Want to purchase plugs with homoerotic GUIs and inferior/useless sound?
Me either.
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Most Exciting Potential:

Outsim's Synthmaker
http://www.synthmaker.com/
V1.0 draws nearer everyday, and it's a good thing, SynthEdit's great, but it's not great for novices.
I for one am looking very forward to the full blown version of Synthmaker, as there's a few synths and effects
I want to make that simply do not exist at the moment.
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Conclusion:
2004 was a hell of a year for VSTs and music software in general, not just in the freeware world. In 2000 I swore that one day the SoftStudio(TM) would be a tangible and complete replacement option for all hardware. That day came faster than I thought it ever would.
To say I'm looking forward to 2005 would be a vast understatement. I simply cannot wait to see what to see what will come next. A synthesizer that uses virtual holographic oscillators consisting of true-spaced relative sound-generative plottable vertices would be a nice start though.

