First thing ya wanna do is check & make sure your CPU isn't maxing out. Go to your 'panels' menu and pull up
'VST Performance'. If the CPU indicator keeps going into the red, you need more ram or less extensions running...or need to take some stuff out of your VST folder. Check to make sure you don't have any VST effects or instruments working either.
If the Disk indicator keeps going red, it means you're either running too many tracks at once or you're hard drive is in serious need of defragmenting. (when you defragment tho, back up your audio files to a separate drive or they can become corrupted.

If the CPU or Drive isn't the problem, go to Options/AudioSetup/System and mess around with the memory per channel and disc block buffer size and reduce the amount of tracks. Also go to ASIO Control Panel (hit Launch) and check to see if the input gains are set properly and Play Through feature is checked.
(Play through is a pain in the arse tho... if you're not monitoring through your computer you don't need it.
If you are monitoring through your computer you have to check that the Play Through thing is checked every time you start up Cubase (at least with a Mac and System 8.6) You also have to check to be sure to click 'Global Disable' or you'll get an echo or bad latency all the time.
With System 9 and above, the play through function doesn't work at all cause of a bug.