I may be wrong ( i often am) but there is no saluting of the VC but i believe the etiquette is that if a VC holder enters a room then all should stand regardless of rank. this is out of respect for the VC holder.
when you read a lot of citations for the VC then maybe they should be accorded the privelage of a salute, again it is not wrong to salute in these situations if your personal view point merits such action.