Cubase installs an older versions of the ReWire.dll and (in some cases) the REX.dll in the wrong place, so they won’t get replaced by the new ReWire REX file that Reason installs. Reason needs the ReWire 2 file in order to run, but when Reason asks the system for the file, all it gets is the older version. This is how to fix it:
1. Go to the Windows\System directory (usually C:\Windows\System\). On some systems this directory shows up empty until you click the ‘Show files’ link in the explorer.
2. Locate the files ReWire.dll and REX.dll in this directory and simply delete them.
3. Launch Reason again – now it should work!
Please note that ReWire will still not work in Cubase 5.0 due to problems with the ReWire implementation in Cubase. Steinberg will soon release a Cubase version that should fix this problem.