OK,
I set it up using 1/4 inch jacks instead of S/PDIF (I don't know where my S/PDIF cables even are any more).
Set-up an audio channel in Cubase. Route the output of that audio channel to one of the outputs on your soundcard (obviously ensure your VST connections have been set-up properly so that you see all your Soundcard's outputs in the output dropdown for the Audio channel.
The next bit depends on how your Soundcard is set-up (personally I mute the inputs on the Soundcard mixer and use Cubase to control them instead). So I created an Audio track in Cubase and set it so monitoring is on (the little speaker on the horizontal channel display or object inspector). I then set its input to be the port on the soundcard that is connected to the Virus output I am going to use.
I started up the Virus TI instance via the VST instruments window and selected Part 1. To save time I went to the patch browser and selected the categories drop-down (OS2.0 only) in VC and then chose input. I then selected an input patch. Still in VC I went into the FX tab and selected the input as static (I am not sure what dynamic is - perhaps it is for S/PDIF). I then set the output to be the output connected to my soundcard port that I selected earlier.
I then placed audio in the first audi channel and pressed play.
If you follow these steps and then replace for an S/PDIF cable and reslect the input and output options for each of the different channels then you should be able to get it working.
Hope this a) makes sense and b) helps...
Drammy