you're problem is right there in your equipment list. Soundblaster sound card. Upgrade ASAP. the latency you are hearing is not midi latency, its audio latency.

In Cubase, go to Device Setup, find the sound card in the list of Asio devices, then open up its Control Panel. Drop the sample rate as low as you can so that you have approx 11-24 ms of latency, that should help your midi problem. But, because SoundBlaster is not a pro card, you will probably experience major audio problems like clicks, pops, or even total audio dropout.

#1 priority, get a new sound card asap, this problem will not go away. All you can do is find a balance between midi latency and sound clicks and pops.

For a cheap PCI soundcard option, look at the Echo devices as well as Emu, they are both ASIO devices with great latency compensation, they just lack the quality Pre-Amps of boutique soundcards. Try to get PCI too, USB devices can have a little latency in them also.