Not quite. You transfer the audio to your KN7000 and link it to the sequencer. Then you can record yourself playing along with the track, using the sequencer. You can do that on multiple tracks at the same time or on one track at a time.
Easier if I give you an example. Let's say you have an audio track with drums and bass. Put it on the CD Card using SD Jukebox (easier said than done eh?). Link it to your sequencer. Synchronise it if you like (all that does is to line up the audio track with the moment that you press the Start button).
Now, say, record a piano part on one of your sequencer tracks, over the top of your audio.
Next, record a strings part in another track, over the top of your audio which will be playing along with the piano you recorded earlier.
Next, record a choir part in another track which will be over the top of the drums & bass audio, the piano sequence and the strings sequence.
And so on, to build up the whole piece.
Yes, to add any additional audio you would have to record the whole thing from KN7000 onto your PC and go through the whole process again. I don't know why you would do that unless you were singing into a microphone hooked up to the KN7000.
If you build up the whole piece in line with my description and THEN sing into a microphone, you can record the whole performance onto your PC. The singing won't record on the KN7000 but it will be sent through the KN7000's audio system so that you will be able to record the sequence you have built up and the singing at the same time, using your PC.
Of course, you could just record the whole sequence onto PC and sing into a microphone connected to your PC using some recording software. But then you won't be able to add reverb etc to the Microphone using the KN7000's effects.
Oh, I'm not saying that any of this is the most efficient way of doing things, just A way to do it.... you could always buy a recording studio, that would be easier