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Why can't I pan when monitoring in Cubase?

I would like to pan monitoring in the headphones while I am tracking, but there appears to be no way to do this. I can pan once the track is down, but not during tracking. I have tried fiddling with all of the settings I can think of.

Is there no way to pan the signal while tracking in Cubase?

Listening Speakers/Monitors

For normal recreational listening, are there any advantages/disadvantages to listening through speakers versus monitors.

From what I understand normal stereo speakers color the sound in pleasurable ways, to make the sound more warm and fuzzy. Also, aren't monitors are designed to provide clarity, even sounds across the spectrum?

Any tips on recording Pedal Steel guitar?

I am having trouble with a fellow who plays a Showbud pedal steel guitar. He is not happy with the sound he is getting from the guitar ( a high 2.5 - 4K raspy sound ).
I have tried to remove some of the frequencies with the EQ and removing the high-endoff the amp,,, any suggestions, other than telling him to buy a new steel?
Any help would be appreciated.