Okay, tested with X3d.  Same behavior.  The default option is OK (highlighted), but I selected 'Cancel'.
 
Selecting 'Cancel' launches Sonar and re-sets Preferences to C:\ drive.
 
Now, after that happened, I closed and launched Sonar a few times.  As long as the Z:\ drive is not connected, the popup window appears, Sonar launches and Preferences remain set to C:\ drive.
 
But, if the Z:\ drive is connected and Windows is reading it prior to launching Sonar, the popup does 'not' appear, and the Preferences remain set to the C:\ drive.  My guess is Sonar knows there should be a Z:\ drive, but the Preferences do not revert to the Z:\ drive?
 
Hope that helps.

For SONAR to work at all, it has to find a good project file location. The project location is used for temporary files. The default is "C:\Cakewalk Projects". When SONAR starts if it cannot find the Project File location defined in preferences, it will automatically reset to "C:\Cakewalk Projects" and update the registry entry. IIRC, if SONAR then cannot read/write the "C:\Cakewalk Projects", it will fail.

Thanks for confirmation Scott.
 
OK so I reported this to the Cakewalk problem reporter CWBRN-22875
 
The Cancel button Should Not Change any Settings when starting Sonar
 
1) Start Sonar
2) In preferences change file locations to a removable USB drive (or other external hard drive, although this scenario hasn't been tested).
3) Quit Sonar
4) Disconnect USB drive
5) Start Sonar
6) As expected a dialogue appears about Sonar resetting Preferences. Two buttons are displayed, Cancel/OK.
7) Click Cancel


EXPECTED

If a project is open and unsaved for some reason user is prompted to save or discard.
Otherwise no settings are changed. Sonar quits.

ACTUAL
Sonar discards settings such as folder locations (behaviour is destructive).

NOTE
Rather than have a "CANCEL" button I think the button should say "QUIT".

Sounds good Alex.  Thanks.

I've experienced this problem as well.  I store my Sonar data on a hot-swappable SATA drive which I only push into the drive bay when I'm going to use Sonar.  Sometimes I forget to do this and am prompted with the "Sonar will now personalize..." message.
 
It would be great if Cakewalk would change the "Cancel" button to "Ignore" and give it functionality similar to what they have done for missing MIDI devices (Sonar asks if they should be ignored).  I like the option to choose what to do rather than have Sonar make the decision and cause me extra work.

The only behaviour possible would be to Close Sonar or continue and update/reset settings.
Ignore would mean in the OP's instance that the project folders would save to nowhereland. Imagine "ignoring" when you've removed a soundcard? Dirty great big crash that is what will happen. The scenario just doesn't work.

I should have asked for *three* buttons:
 
"Continue" = Start Sonar and have it make the necessary changes to avoid ending up in "nowhereland"
"Ignore"    = Start Sonar but preserve previous path settings (allowing the user to turn on/plug in external drives)
"Quit"       = Do not start Sonar
 
Thanks for thinking this through, Alex...

Actually, just two buttons should suffice:
 
"Continue" and "Quit" (as suggested earlier in this thread)
             --or--
"Continue" and "Ignore" (which might correspond to the original, intended functionality of the two buttons).

Again Ignore will not work as I explained earlier.
 
Anyway clearly Cakewalk didn't read my testcase correctly in #13 which was logged under CWBRN-22875
 
They are closed it with "These locations are not document specific. They are saved in the registry and/or ini files".

This doesn't mean anything, we are not saving any settings!!!!
 
(The problem with Cakewalk problem reporter is once it's closed you cannot contact QA when they close it in error, so you are left shouting in the forums).

CAKEWALK PLEASE REOPEN CWBRN-22875 as it has been closed in error (test case misread). CANCEL BUTTON SHOULD BE NON DESTRUCTIVE. Thankyou.
 
 

Alex, an "Ignore" button would work in the following scenario:
 
1. You start Sonar and receive the warning message about your settings
2. This makes you realize that one or more of your external drives are not connected to your system
3. You click "Continue" to proceed into Sonar (without it making any changes to your previous paths)
4. You plug in / power up your external drive(s) *before* playing or editing anything
5. You make some music...
 
Now, yes, I realize that just having "Continue" and "Quit" buttons would also work in this scenario, but it would involve a few extra steps.  Certainly not a big deal.  And I fully realize that Cakewalk would never add a third button given all the other (more important) things that they have to address.  Cheers...