Most people are experiencing a lot more than .5ms of midi slop. That is why they can feel it and even hear it. If we were truly getting sub millisecond timing, nobody would be complaining at all. But we aren't. Only people with hardware midi timestamping are truly getting sub millisecond timing. Nobody using Sonar has that option. MOTU makes pretty much the only midi interfaces with hardware timestamping, but they did not build support for it into their windows drivers. Only for the mac Core Audio and only if the actual sequencer makes use of the timestamps.
Not to sound like a broken record here, but if you playback through plugins, there should be zero slop at time of playback. If you insist on using external midi playback devices, then I'm sorry for you, but more slop.
The real issue is about how you record the midi track from a midi keyboard. There is a lot of slop both in the way the events are captured into the track, but even more latency when you talk about the monitoring aspect. The end result is that the connection of playing and feeling is disconnected at best by several milliseconds and can vary (slop) by as little as .5ms variance in some ideal setups to as much as several more milliseconds, which sometimes brings it into the realm of even the most tone deaf schmoe hearing it.
As has been stated, there is not much Cakewalk, Steinberg or anyone else can do about it other than adopt better hardware/software integration where timestamping is done closer to the time the key is pressed on the keyboard.
Today, the best results will be if (A) you use a hardware sequencer that is built into an actual keyboard, like on the Fantom or something like that using built in sounds...so that no midi cables or PC audio latency are involved. Record the midi track there, transfer the midi track to Sonar, then (B) play it back through a vsti plugin.
Otherwise, live with several ms of slop and stop complaining, there is nothing that can be done about it anytime soon. The vast majority of people that are complaining about midi timing are most likely experiencing 5-10ms(or more) milliseconds of slop and could improve their timing perhaps with a more optimized setup. Nobody is getting 0.5ms. The best Windows setups are probably in the 1-3ms of slop range.
Here is an interesting white paper for the strong hearted that want to understand more about audio and midi software technology in general:
http://www.portaudio.com/docs/portaudio_sync_acmc2003.pdf The bottom line is that most of us are not getting sub millisecond accuracy from midi. Its not even close to that. Its debatable about who can hear it. Its not as debatable about whether there is a disconnected feeling while playing it. But the question I have is that if a good player is instinctually "humanizing" his performance by playing "off the grid" intentionally, then the question remains as to how much midi jitter destroys that aspect of the performance, and which quantizing also destroys? Also, the 960ppqn midi tick grid is a non-musical form of quantization which means that even if every other aspect of midi jitter were eliminated entirely, every midi event still has the potential to be stored in the midi track, inaccurately off by as much as 0.3ms from when it was actually timestamped by the midi driver after all the aforementioned slop. So that is yet MORE slop and worse yet, its almost guaranteed to put the events on non-musical points of time, in terms of that 1ms window, not matter how perfect the player played it on or off the grid...the stored events will not be where they performed it.
In case anyone is interested, there is a Phd that corresponded with me last year when this thread was going full tilt. Here is a project he has been working on related to this very concept. He analyzed some non-midi performances by top players in order to try to figure out what kinds of subtle timing nuances are in the performances of the best available players. This links has a bunch of videos, but there is a link in the middle of the page to read his white paper that explains it.
http://www.tlafx.com/WhatDoesMusicLookLike/index.html He even used a diagram I did for this very thread as part of a later white paper he wrote and presented at a conference:
http://www.tlafx.com/Papers/JASA07_LindsayNordquist.pdf