Just wanted to give everybody who is having this problem a confirmation that it is indeed an issue that has not been resolved; I have the latest versions of everything and still I experience it.
When using WDM drivers with my SBLive, Sonar cannot recognize the SBLive as stereo, only mono. If you use the "Always Use MME" option, it works fine in stereo which drives my latency up like rent in the S.F. bay area.
-SONAR 2.0 XL, brand new baby
-Latest XP SBLive drivers (which is not saying much, they have not released a revision of these drivers since 11/01).
-WindowsXP Professional with EVERY update from windowsupdate.com.
Every other post I read on this problem was with Sonar 1.3. Well, it still exists in 2.0. Until I get my new audio card, I think I am going to roll back to Win2k because I read in one of the threads on this that Win2k runs WDM drivers in Sonar just hunky-dory. We'll see; will post results here.
I originally had this problem too. However, the native SB Live drivers that ship with XP work great for me using WDM, stereo, etc.. I would "roll back" to the original driver. You will probably lose MIDI reverb capability as I did but it was worth it for me.