I should also advise that even though the 'pops and crackles' are evident when recording with lower latencies, once I increase the buffer they are no longer audible..........not sure if that narrows it down?

Have you checked the obvious?  Check your DPC latencies to see if a driver is boogering up your system and causing audio interruptions:

http://www.thesycon.de/deu/latency_check.shtml (fixed link)

What is the maximum DPC latency reported over a few minute time span?  And go ahead and open your DAW application to see if any spiking occurs under that condition.  I'm sure there are TONS of other factors to consider, but every PC I've built has performed well assuming the DPC's are in check (below 100us, and preferably around 10-20us steady).

Beyond that, Firewire adds to the complexity.  IIRC, I've read that using the legacy Firewire driver tends to work much better with RME gear than the newer W7 Firewire driver.  You also have the FW chipset itself to consider, but if it was working fine under XP, then the FW chipset itself shouldn?t be an issue.  I'm not much of a Firewire guy, so I'll let others speak on that...

FWIW ? I know iTunes 64 causes MASSIVE DPC spikes when downloading Podcasts ? just for your info :-)

A bit off topic:

I haven't done much in-depth testing, but W7-32 with Nuendo3 would not scale as well as XP-32 SP3 with Nuendo3 on the same PC (dual boot) - same with Nuendo 4.  I could get quite a few more power-hungry plug-ins (like 3-4 more Amplitubes at full tilt - not a lightweight plugin by any means) running @ 32-Samples under XP w/o pops and clicks.  W7's DPC's were well beow 100us and more like 30-40us, but the XP install was more like 2-10us.  I'm sure DPC's aren't the only factor (as Timur stated above), so what else could be at play?  Both OS's were heavily optimized for offline DAW use.

Has anyone else experienced this from XP to W7-32 on the same PC (with a Dual Boot setup)?  Just curious...

Back on topic :-)

Will enabling MCSS in the RME driver have any effect in W7?  And do you have Cubase set to prioritize the audio (I think they now label it "Boost" or something) in the Device Setup pane?  These seemed to help in my case, but not much.

Interesting about your XP vs W7 (64-bit however) observations.  I was obviosuly using the 32-bit versions of both OS's, and I don't tend to use more than 1.75GB or so in my projects (no VSTi's, just a bunch of Wave files and VST's), but XP was definitely outperforming W7-32 at 32-samples by 10% or so.  Go figure.  I could NEVER get Vista working for low-latency ASIO on ANY of my 4 PC's - who knows? ...

just opened a new project, and set the visuals to 'windows classic'
that also solves the issue for me, I confirmed it by going back to the standard w7 theme *pop/crackle central*

I imagine if I had a faster computer (mines only a 2.2ghz dualcore) I wouldn't even need to do that.

let me know if you have any luck (btw I've disabled all built in sound and selected the legacy driver)

running just as well as xp with lower buffer settings now, and handling more cpu intensive plugins (reverence etc) with higher buffer settings