As mentioned VS refers to the blower, meaning specificly an ECM motor. In a typicle 2 stage furnace, the ECM delivers two specific CFM's (airflow volume) for high and low fire. A modulating furnace has a variable burner and the ECM motor delivers the correct airflow at the given firing rate.
ECM's (Variable speed) also allow you to gain some efficiency for cooling mode and enable the technician to do some things with dehumidification should you need it.
Modulating furnaces vary. The Rheem or Ruud Mod, uses a special thermostat which adjusts the heating output based on room temperature. The York/Coleman uses algorithems and timing to adjust the heat output.
You guys are talking modulated vs. variable speed and assuming it only means the blower. If you look at the Nordyne/Maytag IQ drive 23 seer it has a variable speed compressor and drive to allow the system to only produce the amount of cooling you need and not cycle to match the load.
Modulation usually means more than one capacity step on the system which Carrier, Lennox, Goodman(Amana), Nordyne, Rheem, Trane and York all have. There are multiple designs out there to create modulation in a system. A lot of them use Copeland Scroll UltraTech (2-steps of modulation), some use Bristol TS (Twin single) (2-Step recip) and Trane 19 SEER are tandem recips to get 2 steps of modulation.
Can you guys tell me what Carrier is coming out with soon? I haven't heard about any new system yet!
Lennox has one coming out. It's 1/2 way between York & Rheem. It should use a 2 stage thermostat so it has more input from the space as to room temp vs setpoint to decide how to fire. The guy I talked to at the Lennox booth at Comfortech wasn't too sure beyond that how it was controlled.