I just loaded Melodyne Studio in MC7 for the first time ever. While it has more features than Essential, they are the same VST3 plug-in with a different license. Also I have only tested using the plug-in in the FX rack a couple of times as I did not use the plug-in before Cakewalk integrated ARA support in SONAR. So much for the disclaimers. It seems to work for me. Here is what I did:
Created an audio track and dropped a clip into the track
Added the Melodyne VST3 to the FX rack
Clicked on Transfer in the Melodyne UI and left the Melodyne UI open
Started the MC7 transport and watched the blobs get written in the Melodyne UI
Messed with the blobs a bit in Melodyne and listened to the clip.
It is also possible to add the stand alone Melodyne to the Tools section of the Utilities menu. The downside is that you cannot hear the other tracks while editing in Melodyne. I wrote a utility to make adding programs to the menu a little easier, it is called SONARToolsEditor and it works with the Utilities menu in Cakewalk DAW. It is available
here.