I would make a post at the Line 6 forum. Also try recording into another application just to rule out Riffworks as a problem. Here's a link to Reaper which will run for 30 days without nagging to buy a liscense. You can also test out the multitracking capability of the PodX3. I was able to record all 8 audio outputs to seperate tracks at the same time via the USB 2.0.
http://www.cockos.com/reaper/download.phpAlso on the Line6 Monkey, run a compatability check for Gearbox. It will tell you if all your drives are in DMA mode.
I wouldn't rule out a defective unit yet either.