There are some _really_ gnarly bugs afoot in the production releases of Cubase VST32 5.0. Trust me on this: I damned near tore my hair out for 6 months over one. We'd need to know the exact rev number you have to help more. When you start up, the Cubase splash screen will have a number in black on the Cubase logo: something like "R3PB2", or "R1", or so on. It's also available in the "About" dialog under the "Help" menu.
Many of the earlier versions of VST32 5.0 have some real problems. I had R3PB2, and it gave me flakey record dropouts. Thanks to advice I got here, I upgraded to R4, and then immediately to R5PB6. All these updates are available for free on the Steinberg FTP site,
ftp://ftp.steinberg.net.
R4 appears to be pretty stable, and R5PB6 looks good as well. R3PB2, that came off my CD-ROM, has deep problems. I'm really looking forward to the final R5, myself, because there are still some minor bugs in R5PB6. But at least it doesn't stop recording at random times!
For some more information on current bugs, another useful source of information is
http://www.cubase.net. The general feel there is a little harsher than here, but there is a lot of good info over there, like the semi-official user-community bug lists... Check it out. I've learned a huge amount about this program over the last couple of weeks, and the most important thing is that it is not quite as ready-for-prime-time as the marketing might lead you to believe. I didn't know until this week that that "PB" in the rev number stands for "public beta"... After all, beta code = "No wonder it's flakey!".