monitoring

Yes! Go into the track details and click on the radio button that says monitor on/off and put it to "on".

Sorry I did not realize your question correctly. You are plugging into the headphone jack for your guitar input right? I didn't even know that was possible. I assumed you were going in with a USB. Maybe get a USB adapter for the guitar. Then the headphone jack would be reserved for headphones / speakers. I use a USB mic to capture guitar audio out of my acoustic and mic the amp on my electric guitar.

There does appear to be such a thing.

http://www.bing.com/images/search?q=mini+jack-USB+adapter&qpvt=mini+jack-USB+ada pter&FORM=IGRE

It is amazin how much confusion Apple is creating with its quest for simplicity without letting the user know how the simplified stuff works.

Yes, the MacBook now has only one phone jack. Yes, it has a headphone logo on it. Is it an output jack? The answer is YES and NO and IT DEPENDS.

You can use it either way with an inout or out plug (TR or TRS). You tell the system in the System Preferences if you want to send audio signal into that jack or want to receive an audio signal from the that jack.

Here is a screenshot form the System Preferences with the popup menu for Input or Output selection of the audio port.

If you plug in your earbuds from your iPhone then all of sudden the audio port becomes an in-and-output port. The plug of the earbuds is a TRRS (Tip-Ring-Ring-Sleeve) plug that carries the input and output signal and the MacBook detects that and displays it in the System Preferences. Here is the screenshot:

Think about it when you use your iDevices (iPhones, iPad, etc). Even if you think you plugin a headphone (output) to the jack, it is actually an in-and-output jack.