USB interface midi keyboards
If your midi keyboard has an USB interface that you can connect to your computer, you don't need a midi out (keyboard) – midi in (sound card or midi box) connection to get your midi data into the sequencer, or to play a VST instrument installed in the computer.
Midi keyboards these days come with the USB interface, so you won't need a sound card just for using them.
When do you need the sound card midi?
The sequencer has the midi track. You want to play the midi notes through an external sound module or synthesizer, using a sound patch in the external device.
Then you need to connect the sound card midi out to the midi in of the external device.
Would you like to record the sound produced by the external device? If so
- connect the analog stereo out of the external device to a stereo in of the sound card
- add a stereo audio track in the sequencer and choose the input as the stereo in to which the external device was connected.
Now when you run the sequencer, playing the midi notes through the external device, if you record the audio track you allotted for the external device, the sound produced will be recorded as 'wav' file in the sequencer.
Why would you want to change the midi to an analog wav file in the sequencer?
Now you can apply effects, equalize, work with the wav file just like any other audio file, while when it is just some midi notes, you can't do that.
Also, when you are doing the final mix down, you can't play the external device through the midi out – midi in technique and get the external device sound in real time to make the mix.
You have to convert the external device sound played by the midi notes in the sequencer, to a wav file in the sequencer. Then you can apply effects and mix it down along with the other audio and vst instrument tracks.
Any serious work
If you are considering doing some good work with the sequencer, planning do some mix of your music, do some recordings that you can maybe use as demo or publish, then it is a good idea to get a sound card. The most basic will do.
The sound really gets better with a good sound card. Good soundcards by focusrite and motu don't cost much these days, while giving you good recording quality when using mics, and good digital to analog and analog to digital conversion (mic to computer, computer back to speakers)
Below are three sound cards by focusrite: one under $150, another below $200 and one just above $200 at the time of writing. Focusrite is acclaimed for their preamps and soundcard quality while being in an affordable price range.