I had it working fine in X3 producer 64 bit, but I added a few things at the same time so I am not sure what messed it up....   I upgraded my studio on to professional (also comes with melodyne essential so that install may have screwed it up), and I bought an iLok for the 1st time and added a few plugs so... maybe it is wanting me to license Melodyne on the iLok?  
 
    I tried to use it the other day, I clicked transfer and it seemed to read the data but displayed them all on the same line (like I sang the sentence completely monotone)  and I can quantize timing but pitch correction is greyed out and unavailable?   Last night it worked normally once for a phrase... and I though ok..... It's BACK!   Then I went to transfer the next phrase and all the blobs stayed on the same line again after the transfer.   Any ideas or input from the bakers would be appreciated!

A bunch of views here today.... nobody has any ideas what I should check?

I'm not sure what you mean by "clicked transfer" ? Are you not using the region fx menu ?

I am adding melodyne to a vocal tracks fx bin, opening it, then you hit transfer, then play a segment of the song. Melodyne takes a second when you stop play to read the data and spread each blob out to the note it is closest to. Generally you can then move each blob around to tune them or do a group of them. Only I can't. That's the problem.

Melodyne in Sonar works via ARA, much quicker and simpler than using the FX bin and using the transfer process. Select a clip and press CTRL+M or select Melodyne from the region FX context menu.

EDIT: also, it kinda sounds like the percussion algorithm is selected for some reason. If you still get it using the above method, try manually selecting the melodic mode.

EDIT: oh and thirdly, every first instance of Melodyne in a project opens with some prompts you need to click away (unless you set them to permanently go away), this included the first instance of a project you reopen. If you don't click away the prompt, you can get weird behavior. So check the multidock or your fx bins.

^^^^
This.   Just be sure you have the VST3 version of Melodyne installed.
 

And you can only process single notes in a phrase at a time. No chords.

ChuckC
I am adding melodyne to a vocal tracks fx bin, opening it, then you hit transfer, then play a segment of the song. Melodyne takes a second when you stop play to read the data and spread each blob out to the note it is closest to. Generally you can then move each blob around to tune them or do a group of them. Only I can't. That's the problem.

That's soooooo 2012 ! ;) 
 
Try what Sanderexpander said.

ChuckC
    I tried to use it the other day, I clicked transfer and it seemed to read the data but displayed them all on the same line (like I sang the sentence completely monotone)  and I can quantize timing but pitch correction is greyed out and unavailable?

It looks like "Percussive algorithm". Have you checked it is in "Melodic" mode?

Azslow3 - Thanks!  Yeah I had it set to percussive somehow.   and thank you to everyone else as well,  ARA format is much easier!   Got it working like a champ.
   Here is the only other issue I run into and it is more due to my lack of traditional musical training...   Figuring out if the scale that melodyne has selected is the correct one?   I played some clarinet/sax as a child and don't remember much from that but otherwise I have never been classically trained on any of the instruments I play.  My father taught me the 1st few chords and how to tune a guitar, after that I quickly learned my favorite records by ear (thankfully I was gifted with a very good ear for that) and I would sit and make up riffs myself like most do.  I learned bass, drums, vocals, and some keys the same way.   I do know the notes and chords on the guitar though I have to stop and take a second to tell ya what chords are in a given song I am playing,  I also tune my guitar 1 full step down so I also have to transpose it in my head.  (a D chord on my guitar is technically playing a C, a G is really an F etc.)    Do I just figure out what the 1st note I sing is to determine the key of the scale?  (boy, this is the most Newbie sounding question I have asked on here in freaking years!)   
   All I know is, I was playing around with trying to use melodyne on a copy of a vocal track to generate a harmony to see how it worked, Not well, but I think it is because I have it on scale snap and it was the wrong scale.