I'm not sure I understand what you're getting at here.
By SB do you mean SoundBlaster? If so, which soundblaster?
When you say that you hear distortion when you playback and record...do you mean when you're recording WHILE playing back? If so, is that when the playback tracks sound distorted?
If that's the case then I'm betting you have an SB16, SB32, or (I believe) SB64. These cards are not truely full duplex. When you record while playing back, the playback will be 8bit but what you record will be 16bit. I have an SB16 and have to deal with this.
When you JUST PLAY all of the tracks together do you hear any distortion or does everything sound fine?
Slackmaster 2000