Hey there DB0451,
I share your frustration. I actually modified the POD myself by installing a powered 24MHz crystal oscillator to provide the clock for the OBS UART. While I noticed a huge improvement, I still have problems with USB audio. The POD had gone from the original problem of complete (random) Audio drop out (usually requiring at least a power off of the POD to sometimes a complete computer reboot to get it working again) to at least playing audio fine for a while and then randomly it would the audio would go super distorted. A simple restart of the audio, ie reload you tube video or close and restart Windows Media player. Like Yruama above, I too had noted that after doing the mod, there was no audio dropouts when using ASIO drivers. Just to clarify if you're not sure, ASIO drivers are typically used with professional audio equipment and software as they provide very low latency compared to Windows WDM drivers. In my care I was using Cakewalk SOANAR recording software. So after reading these posts and Yruama's suggestion I thought.. what the hell, I'll unplug the POD for the USB3 card I have installed in my PC and connect it to one of the USB2 ports that are built into the mother board. Low and behold, it works and works great. So I do think there might be something in what Yruama is saying. Perhaps a driver compatabillity issue between line 6 and MS's Window 7 WDM / Directsound Audio drivers. Shrug, don't know enough about how the drivers interact with the OS.
I'd suggest you try some different PC, perhaps something older with USB2 or a windows XP based system and see how you go. Bit of a bummer that it's flaky like this, I'd like to know my POD will work with any PC I connect it too, but I'm at lease now happy that I can play along with you tube how to play clips and use my recording software without problems.
Hope this helps you in some way and thanks to both you and Yruama for giving me the idea to change the USB ports. Will try it on my laptop later :)