Hi John,
 
Not sure what happened there but I set up another controller when giving you those instructions. When you are in the control surface configuration area check to see that when you select play or any of the global settings to the left of the SysX Trigger area, There is a SysX Trigger button that should also be blue ( The reason I said a solid color is that other could have chosen a windows scheme other than default which could change the fill color, so I said a solid color to catch all).  The step at that point was to push play on the MPD and then push learn this should put a value in the section.
 
You could try pushing the play button again and then learn to see if it triggers. My other suggestion at this point would be to push play on the MPD. Select edit- push enter (the screen should say transport)- rotate the knob to say MMC/MIDI- push enter (push the button down) - and then push preset to exit the edit function. This will put the MPD to receive midi machine control and midi messages.
 
Repeat the steps to program the transport and let us know.

NOTE TO LunaTech
Initial success! The transport buttons on MPD26 now work. I have recreated the instructions (so far) so that anyone else can easily follow along. I will say, though, that I don't understand how/why the instructions (shown below) for "PREPARE MPD26 FOR PROGRAMMING" were necessary. Oh well, let's move on. Thank you so far.
 
CREATE A NEW CONTROL SURFACE
(0a) On Sonar, Edit > Preferences > MIDI > Control Surfaces > click yellow "+". This displays the dialog for a new control surface.
(0b) On Sonar, select Cakewalk Generic Surface.
(0c) On Sonar, set In Port = Akai MPD26, set Out Port = None.
(0d) On Sonar, click OK. The new controller now appears in the list of Controllers/Surfaces.
(0e) On Sonar, click Apply.
(0f) On Sonar, click Close.
PREPARE SONAR AND MPD26
(1a) On Sonar, open a project with a simple audio track with a .wav file.
(1b) On Sonar, select Controller/Surface > Cakewalk Generic Surface.
(1c) On Sonar, click Controller/Surface Properties. This displays the controller Properties dialog with the Learn button.
(1d) On MPD26, connect a USB cable to MPD26 and computer running SONAR.
(1e) On MPD26, rotate knob to Sonar and push "Push to Enter" knob.
PREPARE MPD26 FOR PROGRAMMING
(2a) On MPD26, push Play button.
(2b) On MPD26, push Edit button. The screen displays "TRANSPORT". Push "Push to Enter" knob. (2c) On MPD26, rotate "Push to Enter" knob to MMC/MIDI. Push "Push to Enter" knob.
(2e) On MPD26, push Preset. This exits the edit function. Notice that the screen displays "Sonar".
PROGRAM TRANSPORT CONTROL: PLAY
(3a) On Sonar, click Global Parameters > Play.
(3b) On MPD26, push Play button.
(3c) On Sonar, click Learn. Notice that SysX Trigger is now selected and Trigger Message has a Hex value (for example, F07F7F0602F7).
PROGRAM TRANSPORT CONTROL: STOP
(4a) On Sonar, click Global Parameters > Stop.
(4b) On MPD26, push Stop button.
(4c) On Sonar, click Learn. Notice that SysX Trigger is now selected and Trigger Message has a Hex value (for example, F07F7F0601F7).
PROGRAM TRANSPORT CONTROL: FORWARD
(5a) On Sonar, click Global Parameters > Forward.
(5b) On MPD26, push Forward button.
(5c) On Sonar, click Learn. Notice that SysX Trigger is now selected and Trigger Message has a Hex value (for example, F07F7F0604F7).
PROGRAM TRANSPORT CONTROL: REWIND
(6a) On Sonar, click Global Parameters > Rewind.
(6b) On MPD26, push Rewind button.
(6c) On Sonar, click Learn. Notice that SysX Trigger is now selected and Trigger Message has a Hex value (for example, F07F7F0605F7).
PROGRAM TRANSPORT CONTROL: RECORD
(7a) On Sonar, click Global Parameters > Record.
(7b) On MPD26, push Record button.
(7c) On Sonar, click Learn. Notice that SysX Trigger is now selected and Trigger Message has a Hex value (for example, F07F7F0606F7).
(8) On Sonar, save the preset by typing "MPD26" in the preset slot and click "Save".
(9) On Sonar, close the Cakewalk Generic Surface dialog.
(10) On MPD26, push Play. The track with the wave file should begin playing.

Cool John,
 
For the Faders and Sliders (in this instance using the 6 faders to control  the first 6 tracks and using the rotaries to control in this instance the first 6 pans of the first 6 tracks this is what you can do.
 
1. Go to edit - preferences - midi  - control surfaces
2. Select the "+" to create a new surface this time using the "ACT" Midi Controller type instead of the "Cakewalk Generic"
3. Select the MPD 26 as the input and none as the output
4. Choose apply and close.
5. Go to Utilities and choose the newly created ACT Midi Controller
6. Select the Akai MPK 49 preset
7. Select the S1 section in the Act Controller (the dialogue will say "midi learn"
8. Turn the Slider/Fader 1 on the MPD 26. (you should see the fader move in Sonar)
9. Repeat step 8 to program the rest of the faders  for volume and rotaries for Panning.
10. You can save this as a new preset... (Akai MPD 26)
 
I hope this gives you a basic foundation. Let us know how it turns out.

Successful Progress!
First, I connected the MPD26 and left it set to "Live" (I did not select "Sonar"). [you didn't say...]
In Sonar, after selecting "Akai MPK 49" preset (mine actually says "Akai MPK 49 (Preset 30)", clicking on the green part of the S1 section in the Act Controller correctly shows  "midi learn".
For each S1 thru S6, I moved the appropriate fader and in each case that seemed to provide the "midi learn" message.
Now each Akai MPD26 fader moves the assigned Sonar fader, and each Akai MPD26 rotary knob moves the assigned Sonar Pan. 
NOTE: When I slide a fader on the Akai MPD26, the Sonar fader moves immediately and correctly. However, prior to actually getting that immediate movement consistently, it was necessary to move the physical Akai MPD26 fader thru it's complete range of motion. (I may have also done this with the rotary knobs.) This is odd, but certainly not a show stopper.
QUESTION #1: Is it correct to leave the Akai MPD26 as "Live"?
QUESTION #2: What now, Kemo Sabe?

Hi John,
 
Glad that we are moving along.
QUESTION #1: Is it correct to leave the Akai MPD26 as "Live"? I generally keep mine at Sonar as I think Live is referring to an Ableton preset I believe.
QUESTION #2: What now, Kemo Sabe? I would get into programming the pads.  The simple way is to figure out the what mdi note each instrument represents and then keying the pad you want to that note.  On this site there are more advance drum mapping techniques that can be applied to do much the same thing also with greater efficiency.
 
In addition to looking/asking hear for information on that the controller can also using the sliders and rotaries to control synth functions. Of particular interest is sampling synths that can then be used mpc styile with the mpd programming the pads to trigger samples. I have not went that far. I only use it for triggering drums at this time.  But hey we can learn together. Time to explore and come back with more questions.

Since there are a number of Geist owners here I thought I would post this hardware controller map for MPD26 and Geist:
http://www.fxpansion.com/forum/download.php?id=2004
 
"Pad Bank A - Channel 9, pads
Pad Bank B - Channel 9, patterns (first 16)
Pad Bank C/D - Channel 11, scenes (first 16 scenes in pad bank C, & pad bank D starts from C1)

its Preset one in the attached bank,

you should be able to write it to any preset number you want on your MPD26"
 
Have not quite figured out how to use it but I figure a more experienced MPD26 user might