Hi gbotica,
The screen with the asterisks is normal. This is a button test to test the functionality of the buttons on the TranzPort. When a button is pressed an (*) appears under the symbol representing that button.
You can get the TranzPort to stop playing your midi instruments by "unchecking" that check box that says 'In All Midi'.
This isn't where you want to configure the TranzPort in Cubase. Instead go back to the devices/device setup screen. The TranzPort should be listed under remote devices there. If it is there, click on 'TranzPort' under remote devices and on the top right of that window you'll see 'midi in' and 'midi out' fields, these should both be set to 'TranzPort'.
If the TranzPort doesn't show up under 'Remote Devices' you'll want to click on 'Remote Devices' and click on the (+) sign at the top of the window to show a controller list. Select TranzPort from the list, and then configure it as I described in the previous paragraph.
If the TranzPort doesn't show up on that controller list then that means you don't have a TranzPort/Cubase plug-in in Cubase's 'components' folder. If that's the case, you'll want to run the TranzPort driver installer again and this time UNcheck the box for installing the TranzPort driver and CHECK the box to install the Cubase plug-in. This will install the 32-Bit Cubase plug-in for your 32-Bit version of Cubase.
CS