Latency-induced dropouts can also occur due to latency spikes present in the computer's hardware/software configuration, in addition to the above mentioned causes.
That is what running DPC Latency Checker can tell you. There can be bad device drivers or background services running that can jack up the latency on your computer, independently of Sonar, but that affect sound quality in Sonar.
If you change settings on your audio interface, it is recommended that the audio interface be cycled off/on, or a reboot, whichever is easier for you.
I believe you should switch to the ASIO driver mode in Sonar, trying to run at 24-bit recording depth at 44100 Sample Rate for Sonar, and also 44100 Sample Rate and an ASIO Buffer Size of 128 for your audio interface, as a starting point.
Once you have those settings, try the following:
1. Play a song through Windows Media Player and listen for audio problems, assuming you have set your audio interface as your default playback/recording device for Windows.
2. Fire up Sonar, creating a new Normal project.
3. Insert an audio track, then select that audio track.
4. Import an MP3/WMA song file to the audio track in Sonar that you selected.
5. Try playing that back, and listen for audio problems.
6. If the above works, try recording a simple guitar track, with NO effects, and see what happens, posting back your results to this thread.
Bob Bone