If your recorded guitar sounds overdrive, it is most likely clipped by too hot a signal getting recorded.

You have to pay attention to the meter and adjust the gain down until you are not clipping on your loudest guitar sounds.

Once if clips, it is useless.  So, fix that prior to hitting record.  You can always turn things up after, but you never want to have clipped signal getting recorded.

You will likely be frustrated for a while, from where it appears you are in your knowledge of this end of music.  Do not let that get you down - you just have to follow the advice of the several folks who have suggested you spend some time getting things installed correctly and also do the tutorials.  They will really help.

There also a zillion YouTube videos on all aspects of Sonar and of music production in general, and there available videos and books for sale.

Bob Bone

No problem. You should be able to do what you are describing with good results except the vocals. You CAN use a cruddy line in mic into your soundcard but ideally you should get something to plug a proper mic into. You could also get a USB mic which would avoid having to get an interface but again that's not ideal and for the cost of a half decent one you might as well just get an interface with some proper mic pres on it. 

  The other benefit of having an audio interface is it takes some of the strain off of your computer. Your computer is pretty nice though so unless you are doing anything really crazy it should be alright. Read the manual for your Soundblaster as well to see what audio driver mode it works best in for recording then set Sonar to that driver mode in the Preferences menu which is explained in the Sonar manual. 

Good luck.