Re:Recording a guitar in Sonar X1
I have the M-AUDIO Fast Track Ultra, the bigger brother of the unit you're using. They make solid interfaces.
And yes, just like "SToons" said, you can just plug your electric guitar straight into the interface.
The industry standard for amp modeling software is Native Instruments' "Guitar Rig". I use that, but also started using Peavey's "ReValver" amp modeling software.
I'd recommend you to go with one of the two (or even both if you can afford it). I like "Guitar Rig" best for clean sounds and semi-distorted guitars and it also features a great FX section.
"ReValver" on the other hand really delivers in terms of authentic sounding metal and punk sounds (more than "Guitar Rig" IMO), as Peavey included modelings of some of their own amps (6505, JSX, Triple XXX etc.)
When you're ready to record your guitars in SONAR you just insert the amp modeling software inside the FX bin of the desired track(s).