Bernie, since you have a KN7000 why not just load the midi's themselves into your Keyboard and play the midi's that way? You Keyboard's sound engine is going to sound a lot better than any Soft Synth Player on a Laptop. You say you're running the SG50 to the line in of your KN7000. If you want to use a Laptop (for whatever reason that may be) it would be optimal to run it through a Midi 'Port' to your Keyboards Midi IN port. That way you would be using the KN7000's sound engine to process and play the Midi's. Or like you said you could also use .mp3's because the KN7000 is one of those "rare" Arranger Keyboards that can indeed load and play .mp3's. The way I would go about that is to first record the Midi through the Keyboard Outputs to your Laptop/PC, etc. (setting the Melody track to OFF before you do of course) then record the Midi to any Stand Alone Recording Software, eg., Cool Edit Pro, Sound Forge, etc. PS: There are even very inexpensive or free Sofware programs for recording. Then record the Midi and save it as a .wav file (normally the default option) and after that convert the .wav file to .mp3 again using any good converting software. Then simply place the .mp3 on your SD Memory Card, load it into the KN7000 and your off to the races.
Of course the Midi approach is far simpler plus the sound is going to be right up there with .mp3 quality especially on a high end board like the KN7000. Plus the fact that you have more sound control with the Midi because you would be able to change Voices on the fly and mute/unmute different tracks at will. Not to mention all of the other Editing and manipulation you can do with a Midi file as apposed to a .mp3. Someday .mp3's will be as easy to manipulate as a Midi file but until then Midi is the bees knees for having easy control of your sound output and if the Midi is of high quality and precision to begin with the sound can be comparable to .mp3 for quality but it would depend on several factors of course, with the Keyboards sound engine capability or a Laptop/PC's Sound Card and Professional grade Soft Synth being at the top of the list.
Best regards,
Mike