when im choosing my input signal > POD XT  in track view in sonar, i get 3 choices of either left, right or Stereo. should i be using the stereo option? since im using the POD, which is stereo I believe. or does it not matter? wasn't real sure

I use a POD X3, but I only use mono so I only use the Left output.  Its optional what you select and depends on what you are going to do later with the project. 
 
I run my POD X3 into an input channel on my Roland Studio Capture.

I nearly always record the stereo outputs of my Pod.
 
This keeps all options open. If when mixing you decide a track should really be mono, either bounce to mono or insert Channel Tools and narrow it there

POD question. I have an original POD that was updated to a POD II. If you've had experience with them, do you think I would gain anything by upgrading to a POD XT. Of course, I'd look for a used one. I also have a UX-2 interface but rarely use it because I prefer the OctaCapture. Just curious as to what, if anything, I might gain with the XT over the II.
Thanks,
J

I like the POD X3 (also discontinued) over the XT.  I have an XT that I used until the X3's came out.  The X3's are what the XT should have been to start with.  I like the X3 so much I bought a NOS X3 on e-bay so I would have a backup.  I keep the second X3 in my studio.   
 
There is also a later HD model.  I tried an HD and sent it back.  Its not compatible with the XT/X3 "Tones" (what Line 6 calls programs) and I found the effects were not as good as the XT/X3's and sort of "sterile".
 
Live, with my Pedal Steel Guitar, I only use the POD X3 for effects only (e.g. delay/reverb, chorus, phase, distortion).  I have one Tone that I have set up for recording direct (analog to my Studio-Capture).  I also have a couple Tones that I use with a Tele and LP for recording.