Further clarification is that alyhough i can download the drivers and get playback I can't find anywhere that will download the cubase software to allow recording and sequencing etc on my lexicon lambda as the seller didn't have the original installation cd rom, how can I attain the right software to use my usb interface properly?

SOURCE: Cubase REcording/Playback Problems

I was having the same problem with an old Sound Blaster Live audio card. When I was exporting, there would be sound-blank-sound-blank.. etc. The problem was that it could not handle all the effects and plug-ins. It was a Multimedia ASIO driver (software). So, I will guess that either the audio card cannot handle ASIO drivers HARDWARE, either the driver in the devices menu is not set to hardware, and it runs on software ASIO. If your card cannot support hardware ASIO, then you must work with low sample rate (44100) and almost no effects. VST instruments will also have much latency.

SOURCE: cubase se 3 problem

try selecting each imput as mono instead of stereo,and then back to stereo,after a reeboot this worked for me andy hope this helps

SOURCE: usb mic in cubase sx3

you have a pci audio card so maybe you can add an extra input device by going to devices panel or press F4 shortcut.
and choose your usb mic.
also you can check your wavelab audio inputs. they must have the same config so if you can record woth your usb mic and your poci card in wave lave you must be able to do so in cubase sx

hope it works