ok, so this site HB9RYZ - Swiss Amateur Radio Station - QO-100 - Remote DX-Station Rigi Scheidegg
says - the new HDSDR version v2.8 (March 2020) uses the new OmniRig.
It also says "However, OmniRig v1.19 and OmnirRig v2.1 can run on the same computer at the same time."
That apparently is not true. When I have only the old OmniRig installed (installed last) then the VarAC works fine. But if the new one is installed VarAC uses that. However the latest HDSDR, which I use for my SDR panadapter, uses that.
If I cannot find a way to do both then the panadaptor wins out. I won't give up that for VarAC.
I try re-installing the old one and then VarAC worked, Then I go try HDSDR and it appears it can still find the new one.
SO, THE MORAL OF THE STORY APPEARS TO BE THIS:
If you are going to install OmniRig v2 you have to go back and make sure you reinstall OmniRig v1.2 after that.