I hope this helps...I may not explain this as clearly as I want to...

I believe that if Cubase does not recognize midi, it's because you did not 
assign the port correctly. Do you have OMS(Open Music System) by Opcode? 
Cubase uses OMS to create a midi set up file.

I have the same set up as you, but I use a MIDIMAN USB midisport interface 
2x2. OMS creates a midi set up file which assigns to port one and two. Each 
midi in/out is assigned to a port. Then when in Cubase, move mouse to PORT 
and select port one or two; depending on what instruments you have hooked up. 
Make sure midi channels are correctly set in Cubase and in the instruments.

You can download the latest version of OMS free at Opcode's web site. The 
version that came with Cubase may be an older version. 

http://www.opcode.com

If there's any other questions please feel free to email me privately.

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