This is without Cubase LE (or any other audio program) opened, just the Firecontrol panel: When you open the Firecontrol panel and the mixer for outputs 1/2 are not "engaged" it looks like this....

You shouldn't be able to hear anything at that point, since the mixer is off. When you engage the mixer for outputs 1/2 the mixer opens and looks like this...

At that point you should be able to see the meter respond and also hear from both outputs 1/2 and the headphones, provided you have monitors connected to the 1/4" outputs on the back of the FSP and/or headphones plugged in. I just wanted to show what it's supposed to look like when working properly. Let me know if your setup looks the same or different.

This is how you change it to Safe Mode, although I'm not sure that has anything to do with your problem, since you're able to record fine...

Of course, this would just tell you the FSP/Firecontrol is working. When you click the monitor button on in a Cubase track, you should be able to hear your input, even with the Firecontrol's mixer off. You can record and hear playback, so obviously the input and outputs should be correct in Cubase LE. I'm not sure if it's the FSP or Cubase, but it sounds like it has something to do with Cubase LE's setup somewhere.