As far as I know regarding external instruments (WARNING: It's not much, lol), most hardware synths only have one stereo (2 mono) output. This means you are only be able to record audio of two mono instrument patches (L & R), record all instruments patches in Stereo (L + R), or record each individual instrument patch in stereo one at a time. Unless your hardware synth has multiple audio outputs (some come with an integrated audio interface), then this is the limit.
As far as triggering MIDI from Cubase, this should be possible as long as you designate the appropriate MIDI channel to each patch. IOW, you can have multiple MIDI tracks triggering up to 16 patches of your external instrument (or hardware synth) from Cubase. You could possibly even trigger more than this based on the capabilities of your hardware synth.
This video should help: http://www.youtube.com/watch?v=AcR13q1APAsEDIT:
Here's another video (done in Cubase 4 though): http://www.youtube.com/watch?v=SUfXoZMijas
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