Yes and no. They are two seperate titles, but no real advancements were made to the gameplay or graphics between the two, which is why it took GTAVC so little time to come out after GTA3. Small additions like the ability to ride mopeds, motorcycles, airplanes (more easily than in GTA3), and best of all, helicopters There are also several buildings you can go into, and several you can/have to buy.

VC isn't really an expansion pack, because it doesn't require the other game to work, so they're basically two different games. Very fun, though, if you want to go out and blow a lot of stuff up, and listen to Quiet Riot while doing it
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Matt