Seing as I have no synth on my card (audiophile 2496), I had do use the one provided in SONAR . it's called, i beleive, the VSC DXI in the DX Instruments. It's a virtual synthesizer. I recomend you use it. It sounds fine.
What many software loopers, virtual synths and drum machines do is use the CPU to emulate MIDI and as such it actually generates audio data and not MIDI.
There are some free software synths out there for use in audio apps like Sonar but seing as I'm at work, i don't have time for much research. I'll repost if I find the info.
You can use the VSC DXI synth .. just load it up in an audio track, the procede to set the VSC DX synth as the output chanel of your MIDI track, and you should be getting some great sounding MIDI.