rabeach
Midi does not specify pitch notation e.g. C3, C4 etc.
I am pretty sure that the MIDI specification does define standard note numbers and pitches, at least relative to the definition of middle C. Middle C (C4 in scientific pitch notation, 261.625 HZ at A4 = 440) is defined as MIDI note number 60. The confusion comes from the fact that the MIDI note range can represent more notes than are present on the piano keyboard and in fact more than are actually audible. Thus if A4=440 Hz, MIDI note number 12, C0=16.35 Hz using scientific (aka American standard, aka international) pitch notation is inaudible, and MIDI note 0 is even lower at C-1=8.176 Hz. Apparently the negative standard octave number necessitated by the need to cover a range of 0-127 note numbers was more than some designers could handle, so they decided to have their instruments respond to MIDI note # 0 as C0, thus pushing middle C up to C5 in their systems. The designation of C3 for middle C in a lot of MIDI keyboards is probably due to the fact that most such keyboards are short (less than 88 keys) and thus their designers wanted the octave numbers they use to better match the center of the keyboard.
If there is an inconsistency, it is not with the MIDI standard, but with the designers of DAW's and instruments failing to adhere to the most widely accepted standard musical octave notation. The fact is that there exist other inconsistent notation standards, but the use of an arabic numeral following the note letter pretty much commits you to reading it as scientific pitch notation (C4=middle C=about 260 Hz), as other traditional systems use other ways to designate the octave. Apparently Cakewalk, like many others, decided to just make up their own to avoid the troubling negative octave number. In any event, if the instrument you are sending MIDI messages to, or the DAW you are sending it from, uses a notation system in a different octave you are going to need to fix it somewhere. Sonar provides a method to fix this, and most keyboard and other controllers have an octave-shift control that does the same thing. But it is possible that you will need to actually transpose the MIDI tracks to accommodate a variety of different non-standards adopted by various instrument designers.