Sonar X3 and Kontakt 5 - per Bob's request

Oh, SURE.  TAKE me up on my offer!!! :)
 
OK - I will describe what I do to set up a new instance of a multi-instrument Kontakt muilti-rack in Sonar X3e.
 
First, let's make sure we know which Kontakt dll flavor we are working with.  If you have not already renamed the multiple Kontakt dll versions:
 
1.  Click on Utilities>Cakewalk Plugin Manager.
2.  In Plug-in Categories, click on VST Instruments (VSTi)
3.  Scroll down in the Registered Plug-ins, until you see the 3 flavors of Kontakt.
4.  Click ONCE on the 1st Kontakt dll in the list, to select it.
5.  Now, down below the Registered Plug-ins list, click on Plug-in Properties, to bring up the VST Plug-in Properties dialog box for that Kontakt dll.
6.  Click on Details.
7.  You will see the number of outputs that Kontakt dll is set to use, and this is the key to knowing which one you are using.  Now that you know how many outputs this Kontakt dll flavor is set for, alter the NAME of the dll right here in this Details Window, so that the name becomes 'Kontakt 5 - 16 Outputs' (without the quotes), or 'Kontakt 5 - 8 Outputs, or Kontakt 5 - 64 Outputs, as appropriate.  
8.  Click OK and back out to where you see the Registered Plug-ins list, and repeat the process for the other Kontakt dll flavors.
 
When you have completed the above, you will always see the new Kontakt dll names when you go to insert an instance of Kontakt, and that makes things easier.
 
OK - that was the teaser :)
 
Alright, here is what I do for setting up an instance of a Kontakt Multi-Rack in Sonar, along with the corresponding audio and midi tracks:
 
1.  Decide which Kontakt dll you want to use for the given instance, based on how many instruments you intend for it to use.  Each loaded instrument will end up with 2 outputs (L/R).  Your choices are 8 outputs, 16 outputs, or 64-outputs.
 
2.  Use the Browser Pane to insert the desired Kontakt dll into the Synth Rack.  I have chosen to always MANUALLY insert audio and midi tracks, so in the Insert Soft Synth Options dialog Box, I  have CLEARED all the check boxes from the 'Create These Tracks' section of the dialog box.  That way, I never have to look to see what prior settings were used, and is simply a personal choice.
 
3.  OK, so for this example, I happened to choose the Kontakt 5 - 16 Outputs dll (per my renaming conventions as described above in this post).  This version of Kontakt is inserted into the synth rack, and NO audio or midi tracks were inserted for me.  
 
4.  OK - the Kontakt plugin UI opens automatically, because I did leave that checked in the Insert Soft Synth Options dialog.
 
5.  For this example, we will load up 5 instruments.  Load any Piano, Organ, Strings, Electric Piano, and Bass instruments, in that order (for this example).  They will load and get assigned midi channels 1-5 in sequence, with all outputs going to ST 1 (the master stereo outputs).
 
6.  OK, now we have to fix the output routing assignments, so that each instrument gets its own stereo output channels.  Kontakt provides an easy mechanism for this.  If the Output Section is not already showing at the bottom of the Kontakt control panel UI, click on the Output icon way up at the top-center of the Kontakt control panel, to toggle On the display of the audio Output Section.  With it 'On', you will see the outputs and faders and such.  Right now there is a single ST 1, and 4 AUX outptuts, and that just will not do.  Look for the drop-down arrow to the right of where it says 'Presets / Batch Configuration, and click on that arrow to expand that, then hover your mouse over the 'Batch Functions', and when the options open to the right, click on 'Clear output section and create one individual channel for each loaded instrument'.  This will do just that, wiping out whatever was there, and will create a stereo output channel for each of the loaded instruments. 
 
7.  We are not yet done with the output section.  If you notice, each output channel now has the name of each individual preset, which is a mess, and will make our Sonar routing assignments difficult to read.  SO, for each output section channel name, double-click on it to open it for renaming, then do CTRL:+A to select all of the text of that channel name (all characters do not display, so selecting them all guarantees you will be renaming all of the name), and type in a more meaningful name, then hit Enter to complete the channel rename.  Use Piano, Organ, Strings, Electric Piano, and Bass for the new names for the output section channel names.
 
8.  We are now done with the Kontakt control panel, so go ahead and close it.  It is time to set up the audio and midi tracks in the Sonar Track View.
 
9.  For purposes of this walk through, we will create 1 stereo audio track per instrument, so insert 5 stereo audio tracks and 5 midi tracks.  
 
10.  OK, let's take care of Piano first.  Rename the 1st audio track as 'Piano', and set its Input to Kontakt 5 - 16 Outputs 1 - Kt. Piano/Kt. Piano R: Stereo.  (now you see why I had you rename the output section channel names in the Kontakt UI - MUCH easier to assign and see).  
 
11.  Now fix up the midi track for the Piano.  Rename the 1st midi track as 'Piano Midi'.  Leave its Input to the default, and set the Output to Kontakt 5 - 16 Outputs 1.  (the 1 is because it is the 1st instance of the Kontakt 5 - 16 Outputs dll).  Now, we want to also set the midi channel that gets transmitted for this midi track back to Kontakt, so look in the Track Inspector or the Console View for this Piano Midi track, and just under the FX bin, hover your mouse on the 1st parameter you see there, and it will display MIDI Channel = None.  This parameter is called the MIDI Output Channel.  Set it to 1:Kontakt 5 - 16 Outputs, which is for midi channel 1 of your Kontakt instance (which is the correct one for the loaded Piano instrument in the Kontakt instance)
12.  This completes the setup for the Piano instrument.  Repeat the process for the other instruments, adjusting midi channels and names accordingly, so that at the end of it all, you have the audio tracks picking up the output from each instrument loaded into the Kontakt instance, and you have a separate midi track for each loaded instrument in Kontakt, as well.  Further, each midi track transmits on the correct midi channel for the corresponding instrument, and everything has a nice and easy to read name.
 
 
Now, all of that typing is WAY harder to do than to actually DO the setup of one of these Kontakt instances, so PLEASE do not let the number of steps make you think it is either a lengthy or difficult process.  Once you do it a few times, you can whip up an instance and get all the routing assignments and tracks set up in literally 2-3 minutes, or less.
 
FURTHER, when you get the hang of the above, you can also do things like:
 
1.  Create a track folder for the audio and midi tracks of this Kontakt instance.
2.  Save off the audio and midi tracks (and track folder, if you made one), as a Track Template, so that you can VERY quickly insert a fully loaded Kontakt instance with all tracks for commonly used instruments, such as Piano, Strings, etc.  This is SUPER helpful.
3.  You could also set it up and save it off as a Project Template, along with other commonly used settings, which is also a super fast way to create a new project that has commonly used Kontakt instruments.
 
I TRULY hope I have explained the above in an easy to follow manner.  Just walk through it a few times, and you will 'get it' so that you can whip up one of these in no time at all.
 
Another thing I more commonly do is to use separate Left and Right audio tracks for each instrument, rather than a single stereo track.  I do this because I frequently add slightly different effects on the Left and Right channels for each instrument, for purposes of widening the sound, and making it more active to the listener.
 
I also created and saved off a bunch of Kontakt Multi-Racks with their names being an indication of what instruments are loaded into each one, so that I have some pre-made ones ready to go.  These are loaded into a bunch of similarly-named Sonar Track Templates, so that with a single Insert From Track Template, I can load in a commonly used set of Kontakt instrument combinations, not only things like Piano, Organ, Strings, and Bass, but I also have ones for String Section, or Brass Section, or Woodwinds, where I would have perhaps a single track folder for Strings, and it would contain tracks for 10-15 string instruments, all connected to multiple instances of Kontakt, with each Kontakt instance being loaded with Cellos, Violins, or Violas, etc.
 
The sky is the limit on setting up stuff between instances of Kontakt and multiple instruments, along with track templates and track folders, or project templates.
 
PLEASE NOTE that I dimly recall there being some issues with having more than 5-6 instruments in a single instance of Kontakt, something to do with errors in naming output channels.  I just avoid all of that by choosing to never have more than 5 instruments loaded into a single instance of Kontakt, and everything works great with no issues whatsoever.  So, for me, the most commonly used version of Kontakt is the dll with 16 outputs.
 
Bob Bone
 

Under some circumstances all your efforts to create friendly names for your plugins will all come to nought because a plugin reset or scan can return the plugin to its default name. You can however change the default name that Sonar uses by creating and using a variable in the Sonar Cakewalk.ini file as follows. It's a one time thing.

VSTPluginNameFormat=2 this allows me to see the full dll name. It obviates the need for friendly names.

Can be 0-3. As defined below,
0 = VST Name
1 = DLL Name
2 = VST Name (DLL Name)
3 = DLL Name (VST Name)

See page 1578 in the reference manual for more details.