I'm unsure of what audio device - I should use & how to install it?
ummmm... you have to be a little more specific. You're on OS X? What version? Did you install jackosx? Do you have an external audio interface?
I'm using Mac OS 10.6 - installed the jackosx - I have a MOTU Midi device.
As of now, all you can do with a midi controller is bind functions in Ardour with a CC message (maybe midi notes to...). When Ardour 3 becomes available for OS X, you'll be able to do more with it. To control functions with midi in A2 right now, you need midi patchbay (or something like it).
As for audio, any hardware that is recognized by your system (coreaudio) should appear in the devices list of the preferences in jackpilot. That includes your built-in I/O.
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