Yep - absolutely. I run a project called Kicksville that probably implements Sonar in our live show to an extent way beyond anything else I've seen. But, depending on what your needs are, programs like Abelton Live or a VST host like Forte might be better. We use Forte alongside Sonar, and it's a really nice combination.
We basically do what Bob suggested: the whole show is laid out in one giant project file. I press start at the beginning of the show, and barring some horrible screw-up, it runs straight through. We have a really complicated, 72-input show, with all sorts of multimedia stuff going on. The tech is actually part of the show, so everything is run from the stage. We feed a stereo mix to FOH, steal their house DMX control, and Sonar pretty much runs everything:
1. up to 8 tracks of playback
2. 40-ish MIDI tracks for automation
- all audio console automation: fader, mute, pan, effect changes, effect and monitor send automation, routing, etc.
- program change automation for the 4 remote computers running Forte (VST & VSTi host)
- all video switching automation: source, transitions, output, etc.
- all lighting automation: MIDI notes trigger the "go" cues in Light Factory (computer-based lighting console)
3. MTC source for video world, also sends MTC to an analog filter (Filter Factory) to be able to do sync-ed sequencing
4. records a 2-track feed from our onstage console
5. also used for all pre-production, including mixing playback stems and providing reference levels to calibrate external gear
6. main Sonar screen run through a VGA splitter to monitors all over the stage for cueing, plus one large screen on the stage edge so the audience can see what's going on.
Here's an example - the audio is actually the 2-track direct feed back into Sonar, with no editing in post:
http://youtu.be/omElhthKQIQ We've never had any kind of problem with Sonar in the 7 years of touring, but part of that is what we've found to be the key for any computer-based system: don't stress the machine's capabilities, and you will rarely have problems. Even though the Kicksville show is pretty ginormous, the machine running Sonar isn't even breaking a sweat. Running a couple of playback tracks and a pile of MIDI tracks is nothing. All the heavy lifting (like hosting VSTs and whatnot) is spread around on different computers, so no one single machine is getting beat up on.
So...yeah...sorry for the really long answer to a short question ;-) Hope this at least helps explain that you can do an awful lot with Sonar if you want!