I tried 2 years ago to use the SD1 sequencer, and I not understand how it work..
Now I use SONAR 3 with SD1.
I create first my sequence with arranger using the RECORD button. and transfer my midifile song to the computer.
I continue the work with the PC...

I agree there is a realy 'problem' with selecting sounds...

You must know that SD1 sounds when you play live, are using 1, 2 or 3 layered sounds panned and effect differentely, so the sound is big...
In midi you can select only those simple sounds that compose the good ones...
You can make 2 or 3 track to record thoses 2/3 chanels once...
But It's very difficult to sound the same in GM mode and in Live mode...
It's the reason that I will probably buy a new keyboard (yamaha motif es6 or kurzweil K-2661) for my Studio and use the SD1 for live playing...