First of all, use the latest builds of Melodyne and Cubase SX.

Cubase Settings:
• In Cubase SX set the "Audio Buffer Size" to at least 256 samples — we recommend 512 or 1024.
• In the “VST Engine Expert Settings” dialog, set the “Audio Priority” to "Very High" and uncheck "Multi Processing", even if your computer is equipped with multiple processors.

Melodyne settings:
• Be sure to select a larger buffer size than the one you have selected within Cubase.
• Set "Buffer Count" to 8 and "Buffer Preload" to 2.
• If you get drop outs while using the MelodyneBridge, try increasing these parameters.
• If you do this in real time, streaming will stop for a second and the two application will be re-synchronized.

For help on using Melodyne with ReWire, see Knowledgebase article #28493.