Hi, I assume you have connected the vs-700 console to the io unit with the special lead. There should be a console led on the io and an io led on the console.
I am running Sonar X3 at the moment but hopefully you can find the config below used in my own setup.
In Sonar preferences, have you selected CONSOLE (VS-700) as a midi device input AND output. Also in control surfaces, does VS-700-1 appear, with In and Out port set to CONSOLE (VS-700)?