I saw how easy..ahem...converting audio notes to midi was with X3 posted on the cakewalk blog. However, doing exactly as instructed I get no melodyne interface, no conversion and nothing in the midi track. I have Melodyne plug-in installed, so that's not the issue, what am I doing wrong?

You don't need to load the plugin. Assuming it's monophonic audio, just drag the audio clip to a midi track. If it's polyphonic apply melodyne as region fx and tweak the note recognition settings (assuming again that you have melodyne editor).

Did you register Melodyne? Can you enable it on the clip from the Region FX menu? I recommend enabling Melodyne as a region FX first, and then dragging to the MIDI track. I get different (and generally worse) results when I just drag directly from an unprocessed clip.

Tried region FX got nothing just blank track.

Hmmm... you mean the clip disappears and is not replaced by a Melodyne clip? Did you ever get the activation prompt and go through that process? Is your DAW online to allow that? I'm not that familiar with Melodyne, and ARA is new to SONAR so I'm not sure what's wrong, but it seems something's not installed/registered properly.

If I apply region FX it looks like it's doing something for a few seconds but then there's no change and no midi.

Update. Melodyne interface flashes onscreen for a second then disappears, I hope I don't have to do a total reinstall to get this thing working.....crap....

Have you tried Melodyne as a "normal" VST3 plugin just to check whether it's loading correctly outside of ARA?
 

Melodyne does work as normal insert effect.
 

If I do process effect, it thinks about it for a second, melodyne flashes on the screen for 1/4 second then disappears, similar to a pop up blocker in a browser. I tried disabling my firewall to see if that was the issue and it wasn't. Some one suggested in another post to do a Melodyne uninstall and re-install, but how do you do that without re-installing X3 as a whole? I don't recall seeing a separate Melodyne install app.