VST Effects - Can these apply to single channels?

[domc]

So I've managed to get myself confused having done a search on this topic as to whether it's possible to apply VST effects to single tracks in VC mode.
For example
Track 1 would have a pad with say a gate effect like camel space.
Track 2 would have a bass with its own compressor.
Etc.

For some reason I thought that this was possible to a limited extent (eg 3 separate channels) due to the multiple audio streams being passed through the USB cable. Is this true? Or can you only apply one set of audio effects to all 16 tracks from VC at once?

If it is possible to apply it to single tracks, how do you set this up in Live 5 or cubase?

Cheers, Domc