Thanks Kelly, You're welcome!
As Gabriel points out by setting the "use wave out position for timing" check box (also check "trigger and freewheel") in Cakewalk the 1212 i/o will become the 'master' timing source and should play your audio and local midi tracks rock steady. At least in a standlone situation.
Well it sounds like Cakewalk (I assume?) is trying to "chase and lock" to the sync your feeding it (SMPTE?). I'm not sure of your whole story here but the operative word here is synchronization. Just what are you trying to synch to? Video? Can you set the scenario and elaborate a little?