Connect the ouput of the SoundCanvas to the input of your soundcard or usb device. Setup X1 to use that device then place that input on the audio track to record then record. If you use ASIO drivers you can name that input in your preferences dialog under the devices heading.
Hope that helps.
Edit: you will need an external sound device if you computer or laptop does not have an audio input usaully an 1/8 inch stereo jack which will have to be adapted for the output of the SoundCanvas. There are scads of USB interfaces of which just about any would fit your needs.