Sure thing...
As suggested, Audio > Playback and Recording > Driver Mode: ASIO
ALSO
Audio > ASIO Panel > Buffer Size: 128
MIDI > Playback and Recording > Playback - Prepare Using: 700 ms buffers
After I switched to ASIO mode, I was getting the digital distortion in both playback and record.
It went away when I switched Buffer size to 128 in the ASIO panel.
Oh... I also uninstalled NORTON antivirus software and replaced with Security Essentials. And turned off Windows Updates. I don't know if doing that affected anything but, I know that Norton eats up a lot of CPU.
Now I have zero latency in both audio and MIDI.
Hope this helps others who are dealing with the latency issues.
Have also had issues when adding MIDI channels, (and getting the MIDI instruments set up to play and record) but that's another thread. And, I have solved most of those issues already.
~Tim