@kcearl: did you check the control panel under 'sound and sound devices' (or something like that. You can tell it which 'sound device' you want to use for playback, recording, and Midi. You can also set which sound device you want to use individually in a lot of programs (like Winamp, Audacity, Cubase, etc...)
@Marcadiablo: (not sure if problem was fixed.. but for any others who might have same problem. Now.. here is MY take on things.. if anyone thinks/knows it works different, please let me know.
The 'Analog Outs' on the back of the TonePort device are to be used for real time monitoring, and have negligible latency. The cost of no latency is that the sound is possibly degraded some.
To record with this, the sound is usually sent through the USB connection to the computer's DAW, and THIS version of the sound if full, will little or no degradation.
So you can monitor with little latency, and the recorded version is still full quality. (Remember, TonePorts are geared more towards the 'recording' musician. For live performance, you would probably be better off with the POD series of devices from Line6)
If you are recording by running the 'analog out' into your sound card, then recording from the sound card... i suspect that the audio will not be as good as it could be.
Once again.. i could be wrong on this. And if any one knows for sure.. please chime in. Would love to know if this is accurate. The truth is out there...