Hello, Ize --
A vatted malt is comprised of two or more single malts. By legal definition it can only contain malts that are themselves the product of one distillery (each 'single malt' may be from another distillery), whether or not the component whiskies are single-cask versions. The process is often called 'blending', but the end product is only a 'blended malt' if it also contains grain whisky.
The verb 'vat' and its conjugations are often used to describe the process by which a distillery will 'blend' their own whiskies to produce a particular expression. They combine whisky of various ages and barrel finishes to achieve consistency of taste, nose, and/or color.
Thankfully, Scotch Whisky is governed by law ... eventually the fog around terms and such lifts and all becomes clear
PS -- Lex, looks like I cross-posted with you
When I wrote this no one had replied yet. Greetings!
[This message has been edited by St.Peat (edited 05 June 2002).]