[Lynne]

Varname would just be "thread_and_posts" (no quote marks).

This is an example from FORUMHOME:
<phrase 1="$vboptions[bbtitle]">$vbphrase[x_powered_by_vbulletin]</phrase>

So, you would call yours like:
<phrase 1="$posts" 2="$threads">$vbphrase[thread_and_posts]</phrase>

But, the $posts and $threads variables would need to be defined by you (or may already be defined, you need to use the defined variables there in that case.).