Hello all,
 
When using the amp sim (Or any effect) and recording or playing Guitar I get a half second delay - I hear the clean Guitar in real time, the dirty Guitar a half second later.
 
If I record the Guitar clean, then apply an effect it works without a delay however, I want to hear the affect as I record the track...
 
How can I apply an effect to a track and record it in real time? Do I need to use a physical pedal? lol
 

Actually, a physical pedal would give you fewer hassles. It's not unusual, for example, to use a hardware reverb or delay (that isn't recorded, only monitored) for tracking vocals. Some audio interfaces even include built-in effects for that purpose.
 
What you're experiencing is latency, the lag caused by the time it takes for the computer to buffer and process data and spit it back out.
 
You can reduce latency by decreasing the size of your audio buffers, but only up to your computer's ability to keep up with the resulting higher CPU demand. Minimum latency may also be limited by additional buffering that occurs in some plugins, so when you're recording guitar you'll want to disable all other effects.
 
It can be a challenge, using real-time computer-based effects. It's one of the reasons you won't see it practiced in commercial studios.

You might like to check out some of the answers/suggestions in this thread.
Depending on your audio interface you should be able to get latency well below 10ms, in other words almost real time.

Thanks for all the answers, I have a better idea of what to expect when trying to monitor and record in real time.
I'll play around with the settings you mention and see if I can get better performance