Hmm, that's really weird Glenn. Definitely something else going on I'd say. You should never hear this latency thing with input echo on while just recording audio with nothing else happening.
Let me ask you this...when you bring up task manager (ctrl/alt/del) how many running processes do you see? Anything in the 50's or 60's and it very well could slow Sonar down and give you some latency on that input echo. You should always try to kill as many running processes as possible when using Sonar.
Meaning, yahoo messenger, AIM, quick time, browsers, and anything else running that shouldn't really be running. On my dedicated recording pc's, there are 37 things running that I need to be running. I never allow anything to load up automatically on my pc that shouldn't. You know...like MSM messenger or something has an auto-load when Windows starts....or Quicktime has that auto-load...all that stuff, I kill. On the machine I'm talking to you on now which is my net box, there are 53 things running right now. If I run Sonar on THIS box, I will have a few limitations running that many things as it also depends how much CPU and ram they are using, understand?
This is why the majority of guys on this forum have at least one pc that isn't on the net. The less stuff you have running, the better off you'll be with any DAW you use really. But I've noticed that Sonar is a bit pickier than other DAWs I've tried. So I always make sure I have as little running as possible when using it and I normally don't have any issues. Especially on my recording boxes that never go on the net. They run so good, it's easy to see why some people that only have one pc for everything may have a few more issues than those that use one specifically for recording.
I wish I could help you more on this, but if it's some sort of internal latency issue, one of the big dogs on here will have to sort you out there. I've never had anything like that happen on my end so I have no idea how you would handle something like that. But most times, killing some running processes that you don't need running can make a huge difference. Good luck....hopefully someone else more qualified than me chimes in here.
-Danny