Hi Musicmystery:
Welcome to the Cakewalk forums! You can check or consider the things below:
You can check the latency setting for your audio interface under SONAR (Options>Audio>General Tab, Mixing Latency section) and try to lower it somewhere between 64 samples and 256 samples (Buffer Size). Use a setting in that range that works for you without causing pops, clicks, dropouts, etc., during playback/recording. During recording, it should be set as low as possible without causing problems. During playback, it can be raised, if needed.
Did you try using the DPC Latency checker to see if some driver is messing up your latency performance? The DPC Latency Checker can be downloaded from here:
http://www.thesycon.de/deu/latency_check.shtml Try to re-install the drivers for your audio interface, and see if that helps (after a re-install of the drivers use the lower latency settings mentioned above).
You can try to restore your computer to a time when all was working OK (using system restore), but, as I recall, system restore wasn't really good until Windows Vista. But, it did work for some people, so it may be worth a try, at your on risk. You have to decide, so if it messes up something, don't blame me.

Use that as a last resort.
Hope that helps.