Hi Bob,
Many thanks, that link solved the problem! I needed to change the default mode in X3 from 'comping' to 'Sound on Sound' using right click on the Master Record button!
Comping - (Default mode) When recording, previously recorded material on the track is not heard. When a recording is done, the newly recorded material is heard and all other takes are time-muted for the duration of the new material.
Overwrite - The new material replaces (overwrites) any existing material. This means that portions of existing clips may be “wiped clean” to make room for newly recorded material. While recording, you will not be able to hear material from existing clips.
Sound on Sound -The new material is merged with any existing material. This means that any existing clips on the track are left unchanged and all newly recorded material is stored in new clips. While recording, you will be able to hear material from existing clips.
I thought it had something to do with the new Comping features
Cheers!!