Ok, I just looked a bit at VSTHOST.
1) Goto "Device" Menu and select "WAVE"
2) Then for the input port select "VAC1"
3) For Output select "ASIO4ALL"
4) Now figure out how to connect the plugins
5) Test with headphones to see what channels are routed to what.
Allocator has level controls in it.
IF allocator is confusing, try "Rubber filter" instead.
Make sure VAC is set as your Primary Soundcard in the windows sounds control panel.
Here is what is happening if you need to visualize it.
Windows/audio player -> VAC1 -> VSTHOST (thru ASIO4ALL) -> VAC2 -> (Thru Audio repeater) soundcard hardware outputs. You might need to make sure the soundcard is setup for 7.1 output in it's own control panel to activate those hardware outputs
Does this make sense? Try that out and please report back.